Coinbase Posts $79M Net Loss But Beats Expectations

On May 4, Coinbase Global posted losses for the fifth consecutive quarter. The results show that customers and investors have lost favor with the company despite the recovery of the cryptocurrency markets during the first quarter.

The company posted a loss of $79 million, which is far less than the $430 million it lost in the same period last year. The net loss per share equals $0.34.

The results exceeded analyst expectations of $316 million, or $1.45 per share.

Its total revenue was $772.5 million, which is 37% less than the $1.1 billion in revenue for the first quarter of 2022. However, total operating expenses were less than $900 million, resulting in an operating loss of $124 million, according to for a report. The losses were limited by a 20% cut in Coinbase’s workforce in January.

Coinbase retail volumes drop

The company’s retail business didn’t grow much in the first quarter despite posting a 50% gain for the cryptocurrency markets. Its total trading volume fell to $145 billion for the period from $309 billion a year earlier. As a result, total transaction revenue fell 63% to $375 million from more than $1 billion a year ago.

However, Coinbase has some of the highest fees in the industry, so savvy traders may have looked for alternatives.

Coinbase is mired in a regulatory quagmire with threats of enforcement action from the SEC and several looming lawsuits. The legal battle with the SEC could be a long one, but the company expects to be fully operational in the meantime, said chief legal officer Paul Grewal.

The company said this week that it will discontinue Coinbase’s borrowing services as of May 10th. But she did not say whether this was due to regulatory pressure.

The company was also hit by a lawsuit this week accusing executives of dumping millions of shares to prevent losses through insider trading.

Rise in the price of coins

The company’s stock is up nearly 9% in after-hours trading, according to MarketWatch. As a result, the COIN price reached $53.75 on May 4.

Moreover, shares in Coinbase have gained 60% since the start of the year but remain down 84% from their price peak of $343 in November 2021.

The insurgency rate is currently down about 36% from its 2023 high of $84 on March 21 as regulatory pressures intensify. By comparison, cryptocurrency markets are down just 7.5% from their 2023 peak in mid-April.