Coinbase Stock Falls 3% After Earnings Miss

After the third quarter’s net revenue fell short of Wall Street’s expectations, Coinbase’s shares experienced a 3% decline.

Despite the recent Bitcoin price surge to an all-time high (ATH), Coinbase Global Inc (NASDAQ: COIN) has registered bearish sentiment amid the general poor performances of major stock indexes around the globe. The most recent market data indicates that COIN stock closed trading on Wednesday at $211.74, a decrease of 3.61 percent from the day’s opening value.

On Thursday, the crypto exchange stock market maintained a bearish outlook during the New York pre-market session, declining by 3.86 percent to trade at approximately $203.4. The third quarter earnings result, which significantly undershot analysts’ expectations, prompted the $52 billion company to announce a pessimistic outlook within 24 hours.

A Closer Examination of Coinbase’s Q3 Performance

The average revenue analysts surveyed by FactSet anticipated $1.26 billion, while Coinbase Global reported a total revenue of $1.2 billion during the third quarter. Wall Street analysts predicted that Coinbase would report an earnings per share of approximately 45 cents, while the company reported an earnings per share of roughly 28 cents.

Analysts anticipate the company’s EBITDA for the third quarter was approximately $469.2 million, while the actual figure was $449 million. The stock market performance did not match the company’s status as a significant web3 investor.

Anil Gupta, vice president of investor relations, stated, “The results were consistently strong. However, volatility was evident in trading revenues from quarter to quarter, and we observed this phenomenon in Q3. Despite this, we are satisfied with the overall outcome.”

The cryptocurrency exchange has declared that it has $8.2 billion in cash reserves after the third quarter. Consequently, it intends to commence a $1 billion share buyback shortly.

In recent months, the company’s layer two scaling solution, Base, which is Ethereum-based, has experienced exponential growth. Base Network had a total value of over $2.5 billion by the conclusion of the third quarter. From quarter to quarter, the Base network experienced a surge in transactions of over 55% and the deployment of over two new smart contracts.

Market Overview

In the wake of more transparent regulations and the mainstreaming of the crypto market, Coinbase has encountered fierce competition from other cryptocurrency exchanges. Crypto.com has substantially dominated the North American crypto market, primarily due to its extensive altcoin selection, which includes the rapidly expanding meme coin sector, as reported recently.

Nevertheless, Coinbase remains the largest cryptocurrency exchange, with a Bitcoin supply exceeding 800,000, closely followed by Binance, which has a supply exceeding 600,000 tokens. Coinbase Global is anticipated to expand its market share, particularly in light of the anticipated shift toward the crypto market at the upcoming Congress. This is due to the increasing popularity of spot BTC ETFs.