Coinbase reports $1.10B loss in Q2 as assets on exchange slump. Coinbase Global’s Q2 results show that the digital currency exchange posted a net loss of $1.10 billion for the period. That compares with a loss of $430 million in the first quarter and net income of $1.61 billion in the second quarter of 2021. Net income for the second quarter was $803 million, down from $1.17 billion in the first quarter and $2.03 billion in the second quarter of 2021, according to an Aug. 9 shareholder letter. The exchange’s crypto holdings fell from $256 billion in the first quarter to $96 billion in the second quarter. A year ago, in the second quarter of 2021, the assets of the exchange amounted to 180 billion dollars. Coinbase also notes the four major crypto price cycles seen since 2010 in the chart below, from a recent high in November 2021 to a low in June 2022, when Bitcoin’s market cap fell by 74%. The value of crypto assets on exchanges fell from $256 billion in the first quarter to $96 billion in the second quarter. A year ago, in the second quarter of 2021, the assets of the exchange amounted to 180 billion dollars.
Coinbase’s Q2 earnings source: SEC filingCoinbase also notes the four major crypto price cycles seen since 2010 in the chart below, from a recent high in November 2021 to a low in June 2022, when Bitcoin’s market cap fell by 74%. Currency cyclesSource: SEC filing. These cycles are revealed by looking at the price of Bitcoin over time on a logarithmic scale. Previous declines have historically peaked at 84%, 85% and 94%, although these previous declines have not coincided with broader macro declines. In the partner letter, the company compared the latest data for 2020, as “the best way to evaluate Coinbase in the first years of the new industry are the same lenses that estimate encryption – in the price cycle.”From 2020 to 2022, approved users tripled 6 times a month, and the platform assets have increased four times. Coinbase also stated that “difficult market conditions” work to reduce costs.These steps include restrictions on the back and some positions and reduced resources and suggestions. In June, the company reduced staff by 18%.The company optimizes infrastructure and professional services costs and invests in teams in low-cost locations.
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