The “crypto winter” seen in Q2 overshadowed the quarterly results of Coinbase Global (COIN), which fell 10% during the session on Tuesday and another 6% in AH trading (the stock is down 65% YTD). The crypto exchange guided for less trading volume, alongside a smaller amount of monthly active users, in the wake of a cyclical market rout. It also reported a loss of over $1B for the quarter – some of which reflected impairment charges on its crypto and venture investments – compared to $1.6B in net income recorded in the same period last year.
Statistics: Monthly active users were 9M at June 30, compared to 9.2M as of March 3. Trading volumes slid 30% to $217B, from $309B in Q1. Assets on the platform tumbled 63% to $96B, from $256B in the prior quarter.
“Q2 was a test of durability for crypto companies and a complex quarter overall,” Coinbase said in a letter to shareholders. “Dramatic market movements shifted user behavior and trading volume, which impacted transaction revenue, but also highlighted the strength of our risk management program. While we did see net outflows in Q2, we observed that the majority of this behavior was institutional clients de-risking and selling crypto for fiat as opposed to withdrawing their crypto to another platform.”
Conference call: “Of course, we don’t control the macroeconomic factors or downturn,” CEO Brian Armstrong told analysts, adding that the firm is continuing to focus on expense management and being at the forefront of crypto technology. The comments came after the company extended its hiring freeze into the foreseeable future after cutting 18% of its headcount back in June.