Investor confidence has been damaged as a result of the consecutive failures of companies in the cryptocurrency industry. Because of this, businesses offering trader-investor services that have remained afloat do not have extremely high expectations for profitability.
Brian Armstrong, the CEO of Coinbase, stated in a recent interview with Bloomberg that the exchange’s income is expected to drop by almost half this year. He compared the figures to previous year’s and said,
“Last year in 2021, we did about $7 billion of revenue and about $4 billion of positive EBITDA, and this year with everything coming down, it’s looking, you know, about roughly half that or less.”
Based on adjusted EBITDA, Coinbase had predicted it could only lose $500 million in 2022. The business at the time did not give a forecast for total revenue for the entire year. Bloomberg pointed out that Armstrong’s estimate was comparable to the $3.2 billion that analysts had predicted.
It is well known that Coinbase’s primary source of income is transaction fees. The company’s revenue of approximately $7.4 billion in 2021 was derived in a staggering 88% from fees imposed on regular traders’ transactions.
The volume settled on Coinbase has been trending downward despite periodic increases. As shown below, compared to January’s $2.5–$5 billion, the exchange-traded volume has recently been circling the $1 billion threshold. Thus, Coinbase’s revenue would be affected harder if the boring trend continued.
Coinbase Urges Users To Convert To Trusted Stablecoin
In a new campaign that showcases the calibre of reserves that support Circle-owned USD Coin, Coinbase is waiving the conversion fees for users who want to move to a “trusted stablecoin” (USDC).
In a blog post published on Friday morning, Asia time, Coinbase stated,
“The events of the past few weeks have put some stablecoins to the test and we’ve seen a flight to safety……… We believe that USD Coin (USDC) is a trusted and reputable stablecoin.”
For all international retail clients converting USDT to USDC as of right now, according to the firm, there are no costs.
According to on-chain data, USDT is presently trading for 99 cents on Coinbase and is the third most actively traded digital asset there, accounting for 5% of the trading volume.