Coinbase shares fell nearly 15 percent on Tuesday after the cryptocurrency Exchange reported disappointing third-quarter earnings and a shrinking number of active users, a sign that feverish trading has subsided.
Revenue in the third quarter was $ 1.31 billion, up more than 300 percent from the same quarter last year, but well below analysts’ expectations of $ 1.58 billion, according to S&P Capital IQ.
The results indicate a dramatic cooling in crypto-trading compared to the previous buffer quarter, when Currency base achieved net income of $ 1.6 billion on net income of more than $ 2 billion, which surpassed established exchange operators such as CME Group of Chicago and Intercontinental Exchange.
Trading volume fell to $ 327 billion, 29 percent lower from the previous quarter.
Coinbase, what publicly listed in April, also said the number of retail monthly transaction users – retailers who trade at least once a month, known as MTUs – reached 7.4 million in the quarter, up from 2.1 million years ago, but down from 8, 8 million in the previous quarter.
Net income stood at $ 406m, beating consensus estimates of about $ 380m.
“As our year-to-date results have clearly shown, our business is volatile,” the company said in a shareholder letter, urging investors to take a “long-term” view of the cryptocurrency market.
“While we entered Q3 with softer crypto-market conditions, driven by low volatility and declining crypto-asset prices, market conditions improved significantly later in the quarter, which we continued to see in the early Q4,” it added.
Coinbase is in the public eye spit with US regulators, while evaluating how to control free-flowing crypto-markets, which increases the potential of fresh curbs and compliance costs for crypto-enterprises in the future.