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Despite losing $430 million in Q1: Coinbase CEO "more optimistic than ever"

 


Cryptocurrency exchange Coinbase has reported its first net loss of $430 million in the first quarter as a public company. But CEO Brian Armstrong said in a conference about the quarterly results that he was "more optimistic than ever about our position as a company."


Exchange Coinbase reported in its Q1 2022 report that revenue fell 27 percent to $1.17 billion compared to $1.6 billion in Q1 2022. Revenue in the fourth quarter of 2021 was $2.5 billion. The number of monthly users making transactions also fell by over 19 percent to 9.2 million. That compares to 11.4 million last quarter.


Coinbase shares are down 16 percent to close at $73. After the results were released, the price fell further to $61 in after-hours trading. Coinbase stock has been falling steadily since November 2021. At the time, it's nearly hit the $380 peak it made in April last year's IPO.


Despite the declining numbers, Armstrong explained in a conference on the results why he is still optimistic:


“There are so many customers coming to us that we need all the capacity to keep everything running. So the poorer times are sometimes a welcome respite as we can focus on developing the next layer of innovation that we need in the future will benefit next cycle."

Armstrong said the company is "greedy when others are fearful," sourcing talent, and focusing on projects and infrastructure for the future. He also spoke about the "elephant in the room" regarding the company's earnings decline:


“The market as a whole is down. We are seeing a downtrend in high-growth tech stocks and risky assets. Coinbase and cryptocurrencies are not spared either. The good news is that as a crypto company, we have been through many different cycles in the crypto economy, including big ones declines, so I think we're in a good position to operate in those circumstances."

He reminded shareholders of a prospectus the company released a year ago, which said it aims to boost crypto adoption over the long term and operate the company at around breakeven.


Coinbase mentioned its recently opened NFT market in a shareholder letter, which the exchange is increasing its focus on becoming a leader in this space. The exchange also wants to make its platform an "entry into the crypto economy".


Armstrong stated that 54 percent of the platform's active users do something other than crypto trading. However, he did not name any specific activities and did not mention the new NFT marketplace in his opening speech.


When asked if the company was satisfied with activity on its NFT marketplace, Armstrong said the company "won't be providing numbers on our new initiatives," adding that there's "a lot still to build on and the Opportunity in the NFT space is enormous".


On the first day of the opening of the marketplace, only $75,000 in transaction volume was processed in 150 transactions , according to on-chain data . That's a small percentage given the more than 8 million email addresses that had joined the waitlist.


In closing, Armstrong said the industry is still in its infancy and Coinbase sees the opportunity. He added: "It doesn't matter if the market goes up or down, we will keep building."

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