Coinbase shares are getting crushed after-hours following after a disappointing top-line print and declining monthly active transaction users data.
Revenue: $1.31 billion vs. $1.57 billion consensus estimate, according to Bloomberg.
Earnings: $1.62 a share vs $1.56 a share estimate.
While monthly transacting users fell to 7.4mm from 8.8mm (it was better than the 7.09mm expected). Its verified users grew to 73 million.
The company also updated its full-year average monthly transacting user guidance. It now expects between 8 million and 8.5 million such users, up from 5.5 million to 8 million projected in August.
Trading volume fell from $462billion to $327billion, but that was better than the expected $309 billion.
Total retail trading volume was $93 billion, a decrease of 36% compared to Q2.
This decline was roughly in-line with the overall crypto spot market volume decline. Retail contributed 28% to our total trading volume.
The sequential decline in retail trading volume was driven primarily by lower levels of volatility. Retail MTU and trading volume remain highly correlated to volatility.
The firm believes retail MTUs and total trading volume will be higher in Q4 compared with Q3.
Our efforts to attract top talent are enabling us to increase our speed of supporting more assets and deliver new innovative product experiences, including our Prime brokerage offering for institutional customers, our new direct deposit solution, and most recently our plan to introduce Coinbase NFT, a peer-to-peer NFT (non-fungible token) marketplace
But, for now, COIN is down around 12% after-hours...
On the bright side, Crypto adoption continues to trend higher with total internet users...
Additionally, COIN is also diversifying its business and entering the NFT markets:
We recently announced that we are launching Coinbase NFT, a new product experience where users can mint, collect, discover and showcase their NFTs, all in one place. A NFT, or non-fungible token, is a tokenized version of a real-world item (such as art or music) that can be bought, sold, and validated on the blockchain. NFTs are an exciting new opportunity for creators to share their work, and for users to engage directly with creators.
And finally, here is what Coinbase says on regulation:
As we have long advocated, the accelerating adoption of crypto is driving a focus on regulation. Last quarter we pointed to the industry rallying behind efforts to work with U.S. leaders as the Senate debated the infrastructure bill. We continue to see regulation as a critical enabler of crypto growth. That is why we have taken the important step of introducing a proposed regulatory framework, entitled Digital Asset Policy Proposal: Safeguarding America’s Financial Leadership (“dApp”), which we hope will encourage an open and constructive discussion regarding the role of crypto assets in our shared economic future.
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Full Coinbase shareholder letter below: