Today, Tuesday 9 November, at the close of the US markets, the cryptocurrency exchange Coinbase will publish its Q3 results, featuring revenues, volumes, users and more, for July, August and September.
Coinbase, pending Q3 results
“Coinbase’s platform trading volumes are a key metric given the majority of company revenue comes from retail and institutional trading fees”.
This is what John Todaro, research analyst at investment finance firm Needham & Co. said in a note to his clients, with a buy recommendation for the Nasdaq-listed stock.
Leading analysts expect Coinbase to underperform the previous quarter on both volume and earnings per share. The consensus forecast for EPS (earnings per share) is $1.79, about half the second quarter’s figure of $3.45.
Coinbase volumes and users down
The exchange’s volumes are expected to be 37% lower in the third quarter than in the second quarter, according to Bloomberg.
In the second quarter, the company had reported $462 billion in trades on the platform. This quarter, trading is expected to be $313 billion.
The number of monthly active users is also expected to fall to 7 million, down from 8.8 million in the second quarter, as a result of increasingly fierce competition.
However, these forecasts should not affect the share price, which has gained 35% since the end of September.
Coinbase has invested $500 million in cryptocurrencies
In August, Coinbase announced plans to invest $500 million in cryptocurrency assets, Ethereum, Bitcoin and DeFi protocols supported by the platform.
We recently received board approval to purchase over $500M of crypto on our balance sheet to add to our existing holdings. And we'll be investing 10% of all profit going forward in crypto. I expect this percentage to keep growing over time as the cryptoeconomy matures.
— Brian Armstrong (@brian_armstrong) August 19, 2021
This move was clearly intended to strengthen the company’s focus in the crypto world. The CEO Brian Armstrong has always been very committed to strengthening the mass adoption of cryptocurrencies, which must also pass through a precise regulation of crypto assets.
A few days ago, Coinbase submitted a draft proposal for clearer regulation of the crypto market to the US Congress.
On 12 October, the company also announced on its blog that it is ready to launch its own service for NFTs, the new market for non-fungible tokens that is literally revolutionizing the world of decentralized finance.
“Today, we’re announcing Coinbase NFT, a peer-to-peer marketplace that will make minting, purchasing, showcasing, and discovering NFTs easier than ever. Just as Coinbase helped millions of people access Bitcoin for the first time in an easy and trusted way — we want to do the same for the NFTs”.