The actions of Coinbase, the American cryptocurrency trading giant, initially soared when reported its earnings for the fourth quarter of 2021, but investors quickly sold the spike, sending the share price down as much as 9%, to just above an all-time low.
The company exceeded investor expectations in its final period. However, citing a “decrease in crypto asset volatility and crypto asset prices,” Coinbase It said it expects retail monthly transaction users (MTUs, in their parlance) and total trading volume to decline sequentially in the first quarter.
Coinbase Q4
In the fourth quarter of 2021, Coinbase generated $2.500 billion in total revenue, up from $585,1 million in the prior year quarter. The company's huge growth in gross income led to huge profitability gains, with net income soaring from $176,8 million in the last three months of 2020 to $840,2 million in the fourth quarter of 2021.
Investors expected that Coinbase will report $1.94 billion in revenue and earnings per share of $1.85. However, the estimates of income and benefits of Coinbase were far broader, with revenue estimates ranging from $1,19 billion to $2,44 billion, according to the data. provided by Yahoo Finance.
Beyond the numerical details of corporate finance, what can be deduced from the quarter of Coinbase When it comes to the world of cryptocurrencies? Much. The following table shows a lot of information:
It can be seen that the retail commercial activity in terms of volume is still a fraction of its institutional volume; However, it should be noted that retail investors generate not only the vast majority of trading income from Coinbase, but also the importance of the total top line. Despite lower volume, retail trading was worth $2.185 million in revenue in the fourth quarter of 2021, while institutional trading only generated $90,8 million in revenue.
Bitcoin's era of dominance in terms of trading volume and trading revenue generation in Coinbase It is clearly over as well as the Ethereum blockchain in terms of trading volume and trading revenue. To this we can add that the appearance of others crypto assets in terms of trading volumes and revenues are something to analyze by the market; While the world of cryptocurrency sometimes seems to revolve around just two blockchains and their related projects, the revenue story of Coinbase it's a very different picture.
So why is the stock down?
Coinbase it crushed estimates, posted huge profits and grew hugely from the prior year quarter. So why is the stock down? The answer is simple: the market cares more about what you are going to do than what you have done. Guidance, in other words, can trump strong bottom lines.
Before Coinbase Coinbase In its fourth-quarter report, the market expected it to generate $1.690 billion in first-quarter 2022 revenue and earnings per share of 1,55. Did the company's forecasts indicate that it might not reach those marks?
Here is what Coinbase told investors about Q2022 XNUMX so far:
- Total trading volume of 200 billion YTD, which appears to have the company on track to drastically outperform volume figures from recent quarters (see table above).
- Lower “subscription and services revenue” than in QXNUMX, which together with the data point above underscores the fact that Coinbase appears to be sharply reduced overall in the first quarter of 2022 compared to the fourth quarter of 2021.
Looking even further into the future, Coinbase says it expects annual average retail MTUs to reach between five million and fifteen million, a larger range. And the company expects "average revenue per user transaction" to decline to "pre-2021 levels." Investors don't like stories of no growth, and Coinbase did not commit to a growth.
