The S&P/ASX 200 will slip as the rally in US tech stocks fades
Shares of Coinbase Global fell after first-quarter earnings missed estimates and the largest US cryptocurrency exchange warned that total trading volume in the current quarter will be lower than in the first.
Shares of the company fell about 14% after the close of regular markets. Monthly transacting users fell to 9.2 million, below an estimate of 9.5 million. The company expects total trading volume in the second quarter to be lower than in the first quarter, but its outlook for 2022 is “largely unchanged”.
The company’s first-quarter revenue fell to $1.17 billion ($1.7 billion), while analysts had expected revenue of $1.48 billion, according to Bloomberg data.
Coinbase’s results came amid a sell-off in speculative assets ranging from stocks to cryptos in global markets. Bellwether bitcoin is down more than 50% since its all-time high in November, causing many retail traders to sit on the sidelines.
The activity of the crypto exchange is very volatile and suffers from a bear market. Coinbase derives most of its revenue from trading fees, and its shares have fallen to historic lows – down more than 70% from where they traded when the company went public a while ago. a year.
Coinbase is working to diversify its business and reduce its reliance on trading fees. Its staking product – allowing users to place their coins in special high yield accounts – continues to gain traction. Coinbase has also been working on launching crypto derivatives. Last week, it opened its new marketplace for non-fungible tokens — essentially, blockchain-connected digital art — to all users, but adoption has been slow.
Competitive pressures in the crypto market are increasing. Blockchain.com could plan to go public as soon as this year, Bloomberg reported earlier. Binance, the world’s largest cryptocurrency exchange, has just agreed to provide $500 million in funding for Elon Musk’s takeover of Twitter, potentially gaining more user access to the media platform social. Decentralized exchange Uniswap is starting to see volumes approaching those of Coinbase.