Crypto trading platform Coinbase released fourth-quarter results that showed an increase in retail trading volumes — and volatility. Trading volumes are expected to decline in the current period, the company said.
Investors were less than cheered by the results (and the suspicion of a slowdown) immediately after the announcement on Thursday, February 24, sending shares down just over 5% to $169.10. This would put the stock in sight of its recent (and all-time) lows of just under $156.
In terms of the numbers, the company said total transaction revenue was $2.3 billion in the last quarter, up from $476 million a year ago. Net revenue was $2.5 billion, up from a year earlier by $497 million and topping the street at around $2 billion.
The company said its monthly retail transacting users in the last period were 11.4 million, up 4 million from the third quarter, representing 54% sequential growth. Coinbase said 32% of its MTUs used both investment and non-investment products, up from 22% at the end of last year. The company also said that at the end of the last period, it had 3.6 million users who were earning returns on their crypto assets.
The company said transaction volumes jumped 67% year-over-year, and retail accounted for 32% of the tally. During this period, we saw bitcoin trading reach near $69,000, reaching a recent low of around $35,000.
On trading volume, bitcoin accounted for 16% of the total in the last quarter, and Ethereum 16% as well. As measured by transaction revenue, bitcoin accounted for 16% of the total in the most recent period.
Total assets on the company’s platform were $278 billion, up from $255 billion at the end of the third quarter.
Looking ahead, the company said the first quarter of 2022 to date has seen a decline in volatility in crypto assets and asset prices from record highs last year. Total trading volume is expected to be around $200 billion since the start of the quarter and overall volumes are expected to be lower than seen in the fourth quarter.
CEO Brian Armstrong said on the conference call with analysts that “I don’t think we’re entering a crypto winter… The bigger issue isn’t what’s going to happen in any quarter. It’s how to capture this size and magnitude of the opportunity before us. »
Chief Financial Officer Alesia Haas said revenue from subscriptions and services during the year, with $500 million generated in the year and $200 million in the fourth quarter, was up 10 times from to 2020, representing 7% of revenues, compared to 4% a year ago. The company said it expects average annual retail MTUs to be between 5 million and 15 million. The company expects “average transaction revenue per user” to decline to “pre-2021” levels.
Management also said the company is “taking steps to diversify” and grow its non-transaction revenue streams. The company also plans to add more assets to its platform and explicitly mentioned non-fungible tokens (NFTs), where volumes and prices are less correlated with other crypto assets.
Said Haas: “We are focused on a social experience, on building a community… today people can buy on Coinbase, transfer to a wallet, then go to market. If they can do all of this in one app with just a few clicks, that’s a win. »