Sat. Nov 27th, 2021

Coinbase generated revenue of $ 1.24 billion lower than the $ 1.57 billion forecast by analysts.

Coinbase Global Inc. shares fell nearly 12% in postmark trading after the largest U.S. cryptocurrency exchange reported third-quarter results that missed Wall Street’s estimates.

Coinbase, which blamed market turmoil and lower prices for part of the third quarter, generated revenue of $ 1.24 billion, below the $ 1.57 billion forecast by analysts.

Key insights

Coinbase said monthly transaction users on its platform reached 7.4 million, down from 8.8 million in the second quarter. Its verified users have grown to 73 million.

The company also updated its full-year average monthly transaction user lead. It now expects between 8 million and 8.5 million such users, from 5.5 million to 8 million projected in August.

Coinbase took advantage of the listing of Shiba Inu meme token, popular with investors, in September. This, combined with a bull market in crypto forcing more investors to step in, has led to an increase in downloads of Coinbase’s main mobile application.

Coinbase is also diversifying its services, with plans to introduce derivatives as well as a platform for trading non-fungible tokens. The NFT business can be highly profitable: Revenue from established markets like OpenSea has exploded, and OpenSea is taking a 2.5% cut in transactions.

At the same time, in September, Coinbase had to abandon its plans for Lend, which was supposed to earn users interest on currency holdings, due to pressure from the Securities and Exchange Commission.

The company has strengthened its customer service in response to user complaints.
Market reaction

While Coinbase’s shares fell after its April debut as a public company, they peaked on Monday and have risen by about 40% since they started trading.

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