The largest US cryptocurrency exchange Coinbase reported its earnings for the past third quarter of this year: as a result, the total amount was $ 406 million. This is almost 500 percent more than in the third quarter of 2020, but 75 percent less than in the second quarter of this year. However, between April and June 2021, Coinbase reported $ 1.6 billion in revenue . Let's talk about what is happening and its importance in more detail.
Note that representatives of the Coinbase cryptocurrency exchange often comment on what is happening in the coin and blockchain industry - including the former ones. The day before, the former CTO of the crypto exchange Balaji Srinivasan attended the Solana Breakpoint event and emphasized that the cryptocurrency community should stop paying attention to the fight against crypto in individual states.
Instead, they should switch to a global international scale - supposedly in this way they will be able to do much more to develop the digital asset niche. Well, Balaji advised not to touch China : it is allegedly already closed for the coin industry.
How much does Coinbase make?
It's worth noting that most of the financial companies offering crypto products mostly reported declining revenues in the third quarter compared to the second quarter. As noted by Coinbase CFO Alesya Haas, the third quarter was a period of a major correction in the industry and a drop in trading volumes on Coinbase in particular.
This is indeed the case. It all started here in May 2021, when Bitcoin plummeted from $ 59,000 to $ 30,000. We analyzed the events of that day in detail in a separate article.At the same time, a correction phase began, which lasted for several months. At least until the middle of summer, the market was actively falling, which is why many investors were banally afraid to enter positions and were afraid to trade. And since they made fewer transactions and for smaller amounts, all this affected the commissions of the exchanges and their income.
Negative news about Coinbase has badly affected the price of its stock under the ticker COIN. Their value plummeted 13.24 percent after the announcement of the quarterly earnings report. COIN is currently trading at $ 328.6. Over the past 24 hours, the drawdown was 8.06 percent.
COIN price dynamics over the last six months
By comparison, Square, which offers its customers bitcoin trading through its Cash App, reported a 23 percent drop in revenue over the same period. The Robinhood platform has a much worse performance - a 78 percent collapse compared to the second quarter of this year.
Coinbase Project Categories with Institutional Investor Share
According to Decrypt , Bitcoin and Ethereum no longer occupy the leading positions in terms of trading volumes and commissions on Coinbase. If in the second quarter their share of total income was 24 and 26 percent, respectively, then in the next three months it decreased to 19 and 22 percent for BTC and ETH. Most of all Coinbase users are now interested in altcoins, many of them were listed on the exchange this year. However, in the context of individual cryptocurrencies, Bitcoin and Ethereum clearly benefit.
It is important to note that the share of Ethereum trading volumes in the total platform indicator for the second time in a row bypassed the corresponding result of Bitcoin. Accordingly, now investors are more interested in ETH, which has become the home of the NFT token industry and decentralized finance.
Share of various cryptocurrencies in Coinbase trading volumes
We believe that overall, the financial performance of Coinbase and other marketplaces is normal. Yet the behavior of their customers reflects the state of the market, and the latter was far from being in the best condition in the third quarter of 2021. Accordingly, the drop in profitability only indicates that BTC and other coins did not particularly attract the attention of traders. Moreover, in the final quarter, the situation will clearly be better.
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