Coinbase, the largest cryptocurrency exchange in the U.S., reported a decline in earnings last quarter that reflects the major loss of investor confidence in the crypto space. 

Coinbase is directly tied to cryptocurrency prices and both have struggled during the 2022 bear market. From damaging hacks (Axie Infinity), lack of regulation, utility coins blowing up (LUNA), and cryptocurrency prices falling, Coinbase investors dumped risky investments, fearing rising inflation and interest rates. 

The breakdown… 

• Earnings per share (EPS) came in at a loss of $4.98, much worse than the $2.65 loss Wall Street analysts were expecting. 
• Revenue of $803 million was down 64% vs. the same period a year ago… and well below the $830 million consensus estimate. 
• Retail transaction revenue fell 66% year over year (YoY).
• The company is laying off 18% of its employees.
• Overall assets fell from $256 billion to $96 billion, a staggering 62.5% decrease. 

On the bright side…

Over the past month, Bitcoin and Ethereum have surged higher… along with other major coins. Investors are coming back into the crypto market… And we expect Coinbase and other exchanges to see a big rebound in business next quarter. 

Daniel Creech is a Curzio Research analyst with over a decade of experience. He writes on macro trends, large- and small-cap stocks, and digital securities. He’s a regular contributor to Token Tracker, Curzio Research Advisory, and The Dollar Stock Club.