Coinbase, a leading US-based crypto exchange, announced on February 21st that it had exceeded revenue expectations for the fourth quarter of 2022. However, the platform continued to see a decline in transaction volume.
A shareholder letter released by the company revealed that while market capitalization in the crypto industry declined by 64% or $1.5 trillion year-over-year in 2022, Coinbase remained resilient, and long-term fundamentals were strong.
The company’s revenue streams are diversifying, with subscriptions and services driving a 5% increase in net revenues in the fourth quarter. Meanwhile, transaction revenues fell by 12% Q/Q, offset by a 34% Q/Q growth in subscription and services revenue.
Additionally, it ended the fourth quarter with $5.5 billion in total USD resources and $426 million in crypto assets, which puts the company in a strong financial position.
Furthermore, the company’s total corporate exposure to client or counterparty insolvencies was $14 million in 2022, with no loss of customer funds.
However, as regulation looms, the company believes it is well-positioned to benefit. It anticipates that policy developments could pave the way for crypto to realize its full innovative potential, and it will be a beneficiary. It aims to generate Adjusted EBITDA in all market conditions, positioning itself for long-term growth.
Looking ahead to Q1 2023, the crypto markets have shown improvement compared to Q4 of the previous year. As of February 17th, the total market cap of cryptocurrencies has risen by 40% year-to-date.
Additionally, crypto asset volatility increased by 5% during this same period compared to Q4. These market trends are reflected in the company’s trading operations, which recorded transaction revenue of $120 million in January 2023.
Coinbase To Add Support For Euro Coin (EUROC)
Coinbase Assets announced on Twitter that Euro Coin (EUROC) would soon be added to the Ethereum network as an ERC-20 token. It is advised that this asset should not be sent to other networks, as it may result in the loss of funds. Inbound transfers of EUROC are currently available on Coinbase and Coinbase Exchange in regions where trading is supported.
Trading of EUROC is expected to commence on or after 9 AM PT on February 22nd, 2023, subject to the fulfillment of liquidity conditions. Initially, trading will be launched in phases on EUROC-USD and EUROC-EUR trading pairs as soon as a sufficient supply of the asset is established.
However, EUROC support may be restricted in some of the supported jurisdictions. Coinbase plans to add support for EUROC with the Experimental label.
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