The cryptocurrency brokerage lost 27% in the first quarter late Tuesday, falling short of Wall Street forecasts. Coinbase
Shares fell more than 25% to their lowest level on Wednesday.
Coinbase shares are now down more than 75% this year and have been trading nearly 85% below its all-time high since November. The stock has lost half its value in the last one week alone.
The decline in shares of Coinbase coincides with the massive fall in the value of Bitcoin, Ethereum and other cryptocurrencies over the past few months. Coinbase said in its earnings report that 48% of its transaction revenue came from bitcoin and ethereum.
As a result of the volatility, Coinbase reported a sharp decline in the number of users, trading volume and assets from the fourth quarter.
“In the first quarter of 2022, both the low crypto asset prices and the volatility that started in late 2021 continued,” Coinbase said. A letter to shareholders.
But Coinbase added that “the future of crypto is as exciting as ever.”
However, investors were alarmed by Coinbase’s new language Quarterly revenue filing
The Securities and Exchange Commission warned of the risks of bankruptcy.
“In the event of a bankruptcy, the crypto assets we hold on behalf of our customers may be subject to bankruptcy proceedings and such customers may be treated as our common unsecured creditors,” the company said.
If Coinbase declares bankruptcy it will mean that customers will not be able to access the funds.
But Coinbase CEO Brian Armstrong tried to reassure customers and removed any confusion about the bankruptcy talk. In A series of tweets
Late on Tuesday night, Armstrong wrote that “your funds are safe in Coinbase, as they always have been” and that “we are not at risk of bankruptcy”.
As a result of SEC rules, Armstrong wrote that the company should add bankruptcy warning language due to “newly required exposure to public companies holding crypto assets to third parties”.
Coinbase is the highest cryptocurrency company. It attracted a lot of attention for a bizarre (but bustling) Super Bowl ad earlier this year. A QR code
It moved around the screen for 60 seconds.
Coinbase said in its earnings report, “We have made significant improvements in our brand awareness, advantage and concept.”
Coinbase is busy adding other cryptocurrencies like Cardano to its platform. And it has also started a market Fungal tokens
(NFTs), have become digital assets The art and collection is increasingly popular in the world.
However, none of this was enough to prevent a sharp fall in Coinbase’s stocks.
Company Went public last year
It immediately valued nearly $ 100 billion by directly listing its shares on the Nasdaq. The market value of Coinbase is now $ 15 billion.
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