Coinbase posts big revenue beat but expects trading volume to fall in Q1

Monitors display Coinbase signage during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Wednesday, April 14, 2021.

Michael Nagle | Bloomberg | Getty Images

Coinbase reported fourth-quarter earnings that beat analyst estimates after the bell on Thursday. Shares were up about 1.5% during after hours trading following the report.

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Here are the key numbers:

  • Earnings per share (EPS): $3.32, versus $1.85 expected, according to a Refinitiv survey of analysts
  • Revenue: $2.5 billion, versus $1.94 billion expected, according to Refinitiv

The company predicted that retail Monthly Transaction Users (MTUs) and total trading volume would be lower in Q1 2022 compared to Q4 2021. Coinbase attributed the change to decreased crypto asset volatility and a 20% decrease in crypto market capitalization quarter-to-date. It said the declining market cap is driven by macroeconomic factors like geopolitical instability and the U.S. Federal Reserve signaling a tightening of financial conditions.

The report comes after major cryptocurrencies saw a weak month in December despite an overall explosion in value in 2021. Investors blamed the slow end to the year on concerns about cryptocurrency’s energy consumption and on macroeconomic factors like the rise of the omicron Covid variant.

Coinbase warned shareholders in the previous quarter that its stock should be considered a long-term investment since its business is “volatile.”

That’s been demonstrated in recent weeks as major cryptocurrencies like bitcoin fell amid concerns that Russian troops would invade Ukraine. That’s led some analysts to question the idea that bitcoin could act as a safe-haven currency in times of geopolitical instability.

Coinbase shares have fallen about 31% year-to-date as of Wednesday.

This story is developing. Check back for updates.

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