Coinbase Financial Overview for 2022
• Total trading volume decline by 50% year-over-year.
• Transaction revenue fell 66% from 2021 to 2022.
• Net full-year revenue dropped from $7.4 billion in 2021 to $3.1 billion in 2022.
Key Factors Affecting Coinbase’s Performance
The crypto market suffered major losses due to the collapse of key exchanges such as Luna and Terra, and FTX, causing the market to lose 64% of its value and consequently impacting Coinbase’s revenue. In response, Coinbase diversified its revenues into subscriptions and services which enabled it to experience increased quarterly revenue despite the losses.
Operating Expenses
Coinbase reported operating expenses of $1.2 billion for 2022 which was up 3% quarter-over-quarter. The company made efforts to reduce expenses by more than 30%, including layoffs in mid-2022 and early 2023, with a view to stabilize costs going forward.
U.S Dollar Resources
Coinbase ended Q4 2022 with $5.5 billion of U.S dollar resources, a decline of 3% or $148 million from the previous quarter due to market volatility and reduced activity in the sector during this period.
Outlook for Future Growth
Despite the declines experienced throughout 2022, Coinbase remains „resilient“ thanks to its diversification into new areas such as subscriptions and services which has allowed it to experience increased quarterly revenue despite significant headwinds in the crypto space over that period of time.. The company believes that it is well positioned for future growth given the demand for cryptocurrency assets and blockchain technology on a global scale as well as regulatory developments that are expected over the coming years