Crypto enthusiasts and traders are eagerly awaiting the first quarter earnings report for 2023 from U.S-based crypto exchange Coinbase (COIN), with many anticipating some encouraging results. The company is expected to reveal a revenue increase of around 8% compared to the previous quarter, translating to $655 million, up from $605 million in Q4 of 2022. However, it is also forecasted that the earnings report will likely show a quarterly loss of $1.45 per share.
Despite these losses, trading volumes have seen a slight positive change, with the period ending in March 31 estimated to be $148 million, up from $146 million in Q4. Needham’s senior analyst, John Todaro, highlighted this as the first quarter since the crypto boom unwind without a decline in Coinbase’s quarterly volume, sparking optimism that retail volume may have bottomed.
Nonetheless, Needham adjusted their 2023 year-end revenue estimates for the company, citing a “slower recovery than initially projected” and expressing disappointment in the fact that volume “has not risen proportionately to crypto prices.” The revised estimate sits at $3.44 billion, down from $3.66 billion.
The recent banking crisis has triggered a risk-off sentiment, bringing renewed interest to digital assets as traditional finance faces increasing mistrust. Bitcoin saw its value surpass $30,000 on April 10 for the first time since June 10, 2022, with a year-to-date increase of 74%.
Coinbase’s recent unveiling of its derivatives exchange in Bermuda, part of its ongoing international expansion, has also piqued investors’ curiosity due to its potential impact on revenues from fees. This comes as regulators are putting pressure on crypto companies in the U.S. A Barclays analysts’ note called attention to the sizeable non-US crypto derivatives market and considered how this upside “could potentially be meaningful” for Coinbase.
The company’s international exchange will let traders bet on the price of bitcoin and ether via perpetual futures contracts with up to five times leverage, an attractive but highly risky financial instrument banned in the U.S. As Oppenheimer’s senior analyst, Owen Lau, informed CoinDesk TV, “Perpetual futures trading accounts for around 75% of global trading volume,” emphasizing that capturing market share could be incrementally important for the exchange.
In conclusion, while Coinbase may not have fully met the expectations of some analysts, their Q1 report is still anticipated to reflect some positive growth. The company continues to innovate and expand, capturing traders’ attention through its new derivatives exchange in Bermuda. Only time will tell if these efforts will pay off and contribute to more significant growth in future quarters.
Source: Coindesk
