- Coinbase CEO expects company revenue to drop more than 50%.
- Analysts expected Coinbase revenue to be as low as $3.3 billion
- Coinbase share prices dropped by 80%.
Coinbase, one of the most prominent cryptocurrency exchanges, expects a dramatic drop in revenue in 2022. According to Coinbase CEO Brian Armstrong, investors’ faith has been rattled due to plunging prices and the demise of competitor exchange FTX. As a result, it is possible that revenues could drop by as much as 50% from 2021 levels.
“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,” Armstrong said in an interview.
Investors probably are not surprised by the expected drop. Before Coinbase’s third-quarter earnings report was made public, FactSet surveyed analysts who projected $3.3 billion in annual sales for Coinbase in 2022. Current projections put it at $3.2 billion, which is a 59% decrease from projections made for 2021. Specifically, as reported by FactSet, Coinbase made $7.8 billion in revenue in 2022.
Additionally, Coinbase stock has dropped by more than 80% in 2022, and the company’s revenue in the third quarter is just 1/4th of what it was in the last three months of 2021 when Bitcoin hit an all-time high.
The unexpected fall of FTX capped off a disastrous year for the cryptocurrency market, which saw investors leave as the value of several of the most regularly traded tokens plummeted. Meanwhile, Armstrong has been vocal about his displeasure about FTX CEO Sam Bankman-Fried, stating this week that he does not understand “why he [Bankman-Fried] is not in custody already.”
Speaking at the a16z crypto Founder Summit last week, Armstrong said: “The DOJ or somebody should be able to make — just based on his public statements, I think there’s a very open and shut case for fraud. I’m not an expert on this, but the people I talk to seem to agree on that.”