Coinbase expects a softer first quarter after a strong Q4

Coinbase expects a softer first quarter after a strong Q4

Although Coinbase reported strong sales and user growth in the fourth quarter on Thursday evening, managers said that they expect a decline in monthly transaction users and the entire trading volume in the first quarter.

Alesia Haas, Chief Financial Officer from Coinbase, found during the company's conference conference on Thursday that the “softer” trend, which was observed in the first months of 2022, was partly due to lower prices for crypto systems. The price of Bitcoin, for example, has fallen by almost 20 % since the end of 2021.

The monthly transaction users (MTUS) are around 10 million on average, and the company has set an expected MTU area between 5 million and 15 million for 2022. Mtus reached 11.4 million in the fourth quarter.

Coinbase has recorded a trading volume of around $ 200 billion. The trading volume in the last three months of 2021 amounted to a total of $ 547 billion, which corresponds to an increase of almost 70 % compared to the previous quarter

CEO Brian Armstrong said he no longer regarded swings as a "crypto winter", and referred to the increasing use cases for crypto outside of trade, such as NFTS and decentralized finances (defi).

"The biggest problem we have is not to think about what will happen in a certain quarter, but how we actually grasp the size and size of this opportunity that are available to us if there are so many business opportunities worth several billion dollars around us." explained Armstrong.

Income diversification

Although the transaction revenues still make up the lion's share of the income of Coinbase, Haas noticed the company's focus on the diversification of its sources of income in 2022.

Coinbase generated more than $ 500 million in income from subscriptions and services last year-an annoyance compared to 2020-including $ 214 million in the fourth quarter.

This segment accounted for 7 % of the net turnover of the cryptoplate in 2021, compared to 4 % in the previous year.

The company had 3.6 million users at the end of the year who achieved returns with their assets - five times as much as in 2020.

"We are planning to open assets like the ETH for institutions this year, and we are also planning to add more assets and more proof-of-stake chains in which users can take part," said Haas.

Coinbase versus OpenSea?

managers said they expect more than one winner on the resulting NFT market (not fungible tokens).

Coinbase announced in October that it would introduce an NFT marketplace that would enable users to buy, shape and discover the cryptoassets.

Emilie Choi, President and Chief Operating Officer from Coinbase, noticed when calling that they and others are "big fans" from Openea. Coinbase Ventures was an early investor on the NFT marketplace.

"We see many options for innovations, [and] we definitely don't believe that this is a zero -sum game," she added during the phone call.

"Today people can buy on Coinbase, transfer it to a wallet and then go to the marketplace; if you can do all of this in an app with a few clicks, that's a win."

Armstrong said that NFTS would grow far beyond digital works of art.

"There will be many winners," said the CEO. "If you bring a product onto the market and another product looks similar at first, you often tend to diverge over time and find your own niches at some point."

What is the coin price?

The managers also went into the Coinbase share price, which was around $ 175 on Friday at 11:00 a.m. - a decrease of around 30 % over the course of the year. The company became the first publicly traded crypto exchange last April.

Inflation, interest worries and geopolitical tensions - such as the latest invasion in Russia in Ukraine - have contributed to a sale of growth companies in recent months, explained Haas.

The share, added it, correlated with crypto prices. Bitcoin's price, which reached an all -time high of almost $ 70,000 in November, was less than $ 40,000 on Friday morning.

"To be honest, we don't really understand that," said Haas, "since this correlation does not take into account the growth of our market share ... the diversification of our business beyond investments and not to mention the future potential of our business if we expand into new assets and new product flows."

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The Coinbase contribution expects "weaker" first quarter after a strong Q4 is not a financial advice.