- Date : 24/02/2023
- Read: 3 mins
Coinbase made a net loss of US$557 million in Q4 2022, and revenue dropped by 74.8% in Q4 2022 vis-à-vis Q4 2021. Learn how COIN price is affected.
Coinbase Reports Net Loss in Q4 2022: Will COIN Share Price Fall?
Coinbase (a leading crypto exchange in the USA and a publicly traded American company) has reported a US$557 million net loss during the fourth quarter of 2022. The company's net profit was $840 million during Q4 2021. On a year-on-year basis, revenue dropped to US$629.11 million, a fall of 74.8%. Reports say this was mainly due to the drastic drop in trading volume in this cryptocurrency exchange. It fell from US$547 billion in Q4 2022 to US$145 billion in Q4 2021.
Will weak revenues and net loss in the quarter ending in December 2022 lead to a fall in the share price of Coinbase Global Inc (COIN)? Let's find out.
How did Coinbase Share (COIN) Perform?
On February 21, 2023, the COIN price dropped by around -4.8%. If we compare the share price to its all-time high (reached in November 2021), the Coinbase share has lost value of around -82%.
Let’s take a quick look at the historical performance of COIN:
- COIN performance in the last 5 years = -81.6%
- COIN performance in the last 1 year = +65%
- COIN performance in the last 1 month = +11%
- COIN performance on February 21, 2023 = -4.8%
Performance of Coinbase Cryptocurrency Exchange
Revenue and Sales Drop in October-December 2022
The major sources of Coinbase’s revenue are:
- Trading of cryptocurrencies
- Subscription services
The main contributor to the company’s revenue is crypto trading.
Coinbase's total sales dropped by -75% from US$2,490 million during Q4 2021 to US$605 million during Q4 2022. The figures in a different quarter of 2022 were:
- Q1 2022: US$1,164 million
- Q2 2022: US$800 million
- Q3 2022: US$576 million
- Q4 2022: US$610 million
In the fourth quarter of 2021, the company posted a net profit of US$840 million. However, it dropped by around -166% within a year, and the company posted a net loss of US$557 million in the quarter ending December 2022. However, throughout 2022, Coinbase suffered net losses every quarter.
The losses suffered by Coinbase in 2022:
- Q1 2022: - US$429 million
- Q2 2022: - US$1 billion
- Q3 2022: - US$544 million
- Q4 2022: - US$557 million
FTX collapse and bankruptcy filing led to:
- Increased regulatory hurdles and
- Reduced participation of retail investors in crypto trading
With the retail traders pulling back significantly, the crypto trading volume in Coinbase cryptocurrency exchange dropped by around -89% to just US$20 billion.
Due to the poor results, Coinbase didn't announce a dividend when announcing its January 2023 quarter earnings.
At press time, the share price of COIN is hovering around US$61. Most brokerage and research firms expect a significant drop in the share price of Coinbase (COIN). Brokerage Wells Fargo Securities, Brokerage Keybanc Capital, and Brokerage Cowen and Company expect the share price of Coinbase to drop to US$34, US$30, and US$36, respectively.