Coinbase’s difficult Q1 results complicate the market for crypto startups.

early this week, TechCrunch’s Equity podcast drew attention to the chaotic price movement of crypto assets and predicted later this week that Coinbase’s earnings could smooth or complicate the path for startups in the web3 ecosystem. It made sense that if Coinbase reported strong numbers, it could allay concerns about another crypto winter.

That didn’t happen.

Last night on Coinbase Q1 earnings report The already depressed stock plummeted, causing the former public market favorite to drop further below $100 a share. This is well below the all-time high of $368.90 last year.

Coinbase shares today opened at $54.66, down 25% from yesterday’s close.

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This morning — As UST burns and other crypto assets like the newly launched ApeCoin face extreme selling pressure, we will examine Coinbase’s results and what went wrong with its business in Q1.

exchange banner sq red plusCrypto bulls will dismiss all criticism of the company’s performance as a temporary phenomenon in the larger evolution of crypto. For the rest of us, this report serves as a useful lens for understanding the current state of the consumer cryptocurrency market. let’s go!

Fewer users + more cost = big loss

In the first quarter, Coinbase’s revenue more than doubled to $1.17 billion, down 27% year-on-year, and $1.72 billion in operating expenses. The significant increase in spending was in part due to the company’s much larger number of employees. There were 4,948 full-time employees in the first quarter from 3,730 at the end of 2021 and 1,717 at the end of the first quarter of last year.

Coinbase, which reported less than Q4 earnings, also appears to have suffered from some major problems.

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