Coinbase reported a $310 million dollar revenue miss for the first quarter of this year but added millions more monthly users year over year.
- Many experts view cryptocurrency trading exchange Coinbase as a barometer for interest and adoption of cryptocurrencies such as Bitcoin and Ethereum.
- During its Q1 earnings announcement yesterday, the company reported lower than expected revenue of $1.17 billion, while analysts had expected $1.48 billion.
- On the bright side, the company did increase its unique monthly user base for the quarter to 9.2 million users, a 50% increase from the same time a year ago. Analysts say that the number of monthly users is a key indicator of Coinbase’s overall health.
- The company is looking to diversify into more consistent revenue streams beyond fees charged for crypto transactions.
On Tuesday, Coinbase ( NASDAQ : COIN ) announced its earnings for the first quarter of 2022, stating that it generated $ 1.17 billion in tax income for the period, while the markets were expecting it to deliver $ 1.48 billion. That $ 310 million miss represented a 50 % refuse in gross from the former quarter. During the earnings call, Coinbase CEO Brian Amstrong blamed the underwhelming performance on the broader economic downturn. “ I think it ‘s worth equitable addressing the elephant in the room, which is that, of naturally, the broader markets are down. We ‘re seeing a down market for growth technical school stocks and risk assets. And of course, Coinbase and crypto is no exception to that. thus, the good news is that as a crypto company, we ‘ve lived through many different cycles in crypto, including major drawdowns which, I think, make us well-suited to operate through these environments, ” said Armstrong.
At time of writing, COIN was trading at $ 56.70 per parcel, which is a 33 % decrease from yesterday ‘s extremum monetary value of $ 85.03 at 9:45 ante meridiem EST, according to Yahoo ! Finance. Despite the negative tax income numbers, the trade platform saw a year-over-year addition in its monthly transact users ( MTUs ). Coinbase had 9.2 million MTUs in the first quarter of this year, compared to 6.1 million in 2021, marking a 50 % increase. The number of active monthly users is an authoritative meter of health for the rally and bodes well for its future .
How Coinbase makes money
Coinbase is presently the largest cryptocurrency substitution in the United States, and it makes most of its money from fees it charges users to buy and sell digital assets on the platform. For the past few quarters, it has made focused efforts to diversify into more stable recurring tax income streams such as subscriptions and services like providing businesses access to its Coinbase Cloud computing solution which is similar to Amazon ‘s AWS service ; crypto stake ; user custodial digital wallets ; requital services including its new credit batting order ; american samoa well as its long-awaited non-fungible token ( NFT ) marketplace to compete with OpenSea and Rarity. “ Coinbase has an authoritative function to play in the crypto economy as we execute on the second and third gear pillars of our strategy — crypto as a raw fiscal system and crypto as an app platform. We are investing heavily in products such as Coinbase Wallet and Coinbase NFT to help us emerge as a drawing card in these new markets. We are in a firm status to help drive and lead crypto ‘s next phase, and that ‘s where our investments will be focused, ” the company stated in its letter to shareholders issued yesterday .
Is Coinbase a good buy?
As background, Coinbase had its initial public stock extend on April 14, 2021, with a launching number price of $ 250 a share when it began trading on the tech-heavy NASDAQ breed exchange. The price of COIN livestock surged more than 70 % within hours of its introduction, to hit a high of $ 429.54 before closing its inaugural trading day at $ 328.28. At that meter, the party had a market capitalization of $ 87.3 billion. Since Coinbase provides trade options for dozens of the most popular and valuable virtual currency projects, it is wide regarded as a de facto crypto “ index fund ” that provides across-the-board crypto access with a individual investment fomite.
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We ’ ve found one company that ’ sulfur positioned itself absolutely as a long-run picks-and-shovels solution for the broader crypto market — Bitcoin, Dogecoin, and all the others. In fact, you ‘ve credibly used this ship’s company ‘s technology in the past few days, even if you ‘ve never had an account or even heard of the company earlier. That ‘s how prevailing it ‘s become. Sign up today for Stock Advisor and get access to our single report where you can get the full exclusive on this company and its top as a long-run investment. Learn more and get started nowadays with a special new member discount.Get started As of today ‘s price natural process, COIN is trading at an 87 % dismiss from its all-time high gear. This is not fiscal advice, and investors should always do their own research and invest lone amounts they can well afford to lose. But given Coinbase ‘s scale, ease of use, market parcel, structure as a default option crypto index fund, and diversification plans, my personal opinion is that it ‘s decidedly deserving considering at this price.
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