Key points to remember
- Coinbase reported higher than expected earnings yesterday.
- The company earned $604 million in revenue in the final quarter of 2022, topping the $590 million it earned in the third quarter.
- Coinbase’s performance was partly due to growth in its interest income.
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Coinbase claimed in its latest earnings report that it has proven to be “largely resilient despite major shocks to the system.”
Coinbase starts the year strong.
The first US-based crypto exchange reported $604 million in revenue in the fourth quarter of 2022, beating estimates that it would bring in $589 million. That’s 5% more than the $590 million the company made in the third quarter of the year.
Coinbase’s performance was partly due to growth in its interest income, which came in at $186 million, compared to $101 million in the prior quarter. Of the $186 million, $146 million came from the company’s USDC interest income. Coinbase CEO Brian Armstrong previously stated his ambition to have the exchange no longer rely primarily on transaction fees as a source of revenue in order to reduce the company’s reliance on good market conditions.
“Coinbase and crypto have proven to be largely resilient in 2022 despite major system shocks,” the report said. As crypto market capitalization fell 64% year-over-year and volatility hit multi-year lows, the company said long-term fundamentals remain strong for Coinbase and the crypto industry. cryptography.
The report also touched on the regulatory landscape in the United States, which it described as “disjointed”. He pointed to the collapse of FTX in November as a major catalyst for the increased attention crypto companies have received from regulators, particularly the SEC. The report states that Coinbase should ultimately benefit from a clearer regulatory framework, which could eventually take the form of federal crypto legislation passed by Congress. “Politics is my top priority this year,” Armstrong said in an earnings call.
Regarding its outlook for 2023, Coinbase said it is “prepared to manage (its) business through a wide range of transaction revenue scenarios in 2023, which include possible increases, decreases or stabilization of the crypto market capitalization and volatility of crypto assets”. compared to end-2022 levels.”
Disclaimer: At the time of writing this article, the author of this article owned BTC, ETH, and several other crypto assets.