Coinbase fell by 18% in pre-market trading after Q1 results fell short of analyst estimates.


  • Coinbase fell 18% in the preload market on Wednesday, beating analysts’ expectations for the first quarter.
  • The company fixed its Q1 earnings as “weakened cryptocurrency market conditions”.
  • The rise in interest rates has quieted the cryptocurrency market as investors hedged their risk.

Coinbase fell 18% in pre-market trading on Wednesday. Q1 earnings.

The decline is set against the backdrop of a decline in the cryptocurrency market as interest rate hikes and rising inflation drive investors away from riskier assets.

Cryptocurrency exchanges’ first quarter trading volume was $309 billion, down 7% year-over-year, but down 44% in the fourth quarter of 2021. Net revenue was $1.2 billion, down 56% year-over-year. Q4.

Coinbase reported a net loss of $430 million in the first quarter of 2022. This compares to net income of $771 million at this point last year. The company underperformed “weakened cryptocurrency market conditions” during the first three months of the year, when the overall crypto market fell compared to the fourth quarter of last year, when many cryptocurrencies, including Bitcoin, hit record highs.

“Obviously, I think it’s worth dealing with the elephant in the broader market down room,” said Brian Armstrong, Coinbase CEO. “We’re seeing a down market for growth tech stocks and risky assets.” On an earnings call with the field.

However, he said that Coinbase “does the best thing” during “recession times”, adding that in fact, Coinbase has “never been bullish” about its position as a company.

At time of writing, Coinbase was down about 17.5% from Tuesday’s close at around $60.19, briefly dropping below $60 the day before. The stock closed at $72.99, down 12% in regular trading the previous day.

Coinbase has suffered more damage than Bitcoin so far this year. The stock is down 71% compared to the 33% decline in Bitcoin’s value since early 2022. The company went public 13 months ago when its stock price soared to nearly $430 when it went public. Since then, it has lost nearly 85% of its value.

Cryptocurrency market along with stocks and bonds Federal Reserve Efforts to combat inflation have bolstered by raising interest rates. central bank benchmarked At the beginning of this month, it fell 0.5 percentage points to 1%, the largest increase in 22 years.

Soaring inflation at a 40-year high and higher interest rates have made investors more wary of risky assets, including cryptocurrencies. Some like BlackRock are telling investors to avoid risk, while others are still bullish, like JPMorgan chief strategist Marco Kolanovic, who says the market has reached “hawk peak”.

Coinbase says it plans to make significant investments prudently throughout 2022, although a “long-term, stressful scenario” is expected for the business going forward. “We believe these market conditions are not permanent and we continue to focus on the long term.”

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