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Brian Armstrong, Chief Executive Officer (CEO) of American cryptocurrency exchange Coinbase believes that his firm’s revenue will plunge below 50% of its 2021 value as the bearish market persists.
Armstrong condemned the current state of the crypto industry which has caused prices to decline and the collapse of the FTX Derivatives Exchange that has led to misplacement of trust amongst investors.
Since the crash of Terra in May, the crypto industry had been in an ugly situation, however, the liquidity crunch faced by FTX further intensified the bearishness of the market. Investors have become more aware of their assets whose prices keep dwindling and decided to retreat leading to massive withdrawals from crypto exchanges globally.
For Coinbase, its shares have already fallen below 80% since this year. Markedly, its Q3 revenue was one-fourth of its value in the last three months of 2022. Those last three months were when the price of Bitcoin (BTC) reached $69,000.
Armstrong’s Prediction Tallies With Analysts’
During David Rubenstein Show: Peer-to-Peer Conversations on Bloomberg, Armstrong 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.”
Meanwhile, analysts surveyed by FactSet released an estimate of Coinbase’s annual revenue for 2022 even before its Q3 earnings report was published.
According to the estimate, Coinbase’s annual revenue was fixed at $3.3 billion. On the other hand, Coinbase initially thought that its 2022 loss will not go beyond $500 million due to the adjusted EBITDA.
The EBITDA is a measure of earnings which does not include costs like interest and depreciation. Currently, the exchange is looking at closing the year with $3.2 billion and this would end up as a 59% decline from its revenue in 2021. Armstrong’s estimate seems to be in line with that of the analysts.
Amidst the current market condition, Coinbase like many other crypto firms has been pushed to undergo a downsizing of its workforce. The exchange laid off up to 60 employees from its recruiting and institutional onboarding teams.
The post Coinbase CEO Predicts More Than 50% Revenue Decline in 2022 appeared first on Blockchain, Crypto and Stock News.
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