Coinbase shares fell nearly 15 percent Tuesday after crypto currency the exchange reported a disappointing third-party revenue and a declining consumer spending rate, indicating a slowdown in sales.
Third-party earnings were $ 1.31bn, a 300 percent increase over the same quarter last year, but below expectations of $ 1.58bn, according to S&P Capital IQ.
The results show a much cooler growth in crypto trading compared to the previous quarter, when Coinbase invested $ 1.6bn in total revenue of more than $ 2bn, surpassing established partners such as the CME Group Chicago and the Intercontinental Exchange.
Sales volume fell to $ 327bn, down 29% compared to the previous quarter.
Coinbase, amen publicly written in April, he also reported that the number of monthly retailers – once-monthly sales, known as MTUs – reached 7.4m a quarter, from 2.1m a year ago but down from 8.8m in the previous quarter.
The total amount stood at $ 406m, beyond the agreed limit of about $ 380m.
It comes at a time when crypto market volatility and instability have declined in the summer when meme content changes were lost. Last month, the online Robinhood also showed a sharp decline in crypto business, hurting the company’s growth.
“As our annual results clearly show, our business is stable,” Coinbase said in a letter to shareholders, urging investors to take a “long-term” crypto market.
“As we entered Q3 with the soft material of the crypto market, led by volatility and falling crypto prices, market conditions improved well later in the region where we continued to see early Q4,” it added.
Indeed, bitcoin and ethereum, two of the most popular cryptocurrencies, hit hardest on Monday by more than $ 68,000 and $ 4,830 respectively. Two digital currencies account for 19 percent and 22 percent of the total trading volume on the platform in the third quarter, the company said, with other cryptocurrencies representing the remaining 59 percent.
Recently, the company has begun to diversify into new businesses, for example, announcing last month to establish a market for tokens that would not appear in the midst of the ongoing digital crisis.
Coinbase has been publicly included met with US regulators, while exploring how to run the freewheeling crypto markets, boosting the potential for new mitigation strategies and the pursuit of crypto business funds in the future.
In September, Coinbase CEO Brian Armstrong criticized the US Securities and Exchange Commission for being “sketchy” and opaque after a regulator threatened to sue the company if he found a product that paid interest on cryptocurrencies at risk without legal registration.
Embarrassed, Coinbase later suspended plans for the event. But now call the creation of a single organization dedicated to overseeing the digital economy, keeping in mind that American security laws a century ago were not compatible with crypto markets.