Coinbase stunned investors on Tuesday, with their fourth-quarter earnings coming in ahead of expectations at $605 million. Despite this promising result, the crypto exchange’s year-over-year performance revealed a worrying drop of 76% from net revenue in the same quarter of 2021 and 57% for the entire fiscal year. The overall loss has been estimated around 2.6 billion.
JUST IN: Coinbase $COIN reports a net loss of $2.62 billion in 2022. That’s only a loss of $655 million a quarter. Upwards and onwards!
— Jason A. Williams (@GoingParabolic) February 22, 2023
This dip emphasized the need for savvy traders to maintain vigilance even during times of apparent success. Let us delve deeper into the matter to learn more about the cause of such a worrying drop.
What are the Reasons for Coinbase’s Worrying Drop?
2022 was a turbulent year for the entire cryptocurrency market. As witnessed by the $1.5 trillion drop in the crypto market cap the industry felt an unprecedented headwind over the course. Factors such as strict regulations, unfavorable macroeconomic conditions, and waning investor confidence are responsible for this fall. Due to these turbulent events, Coinbase suffered from this worrying drop.
Furthermore, SEC’s recent activities against crypto-staking services are responsible for this worrying figure. Recently the crypto enthusiasts were dealt a major blow as the much-lauded Coinbase plummeted 14% in value after the Securities and Exchange Commission’s (SEC) crackdown on Kraken Crypto Staking service. The action has further heightened investors’ fear, who are now living in dread of potential enforcement actions.
However, Armstrong, the CEO of the leading crypto platform, recently made an effort to combat widespread fear and rumors about its staking program. In a bold move, Armstrong asserted that Coinbase’s services are not securities and promised pushback and he can confidently prove it to SEC. Despite this assertion, the fear and criticism persist, thus Armstrong and the company are obviously in survival mode.
Coinbase's staking services are not securities. We will happily defend this in court if needed.https://t.co/GtTOz77YV3
— Brian Armstrong (@brian_armstrong) February 12, 2023
