Due To The Falling Crypto Market, Coinbase Loses IDR 16 Trillion In The Second Quarter Of 2022

Crypto trading company Coinbase suffers losses. (TotalBitcoins)

JAKARTA – One of the largest crypto trading companies in the United States, Coinbase, recently suffered losses in the second quarter of 2022. Reports state that the company suffered a net loss of US$1.1 billion (around IDR 16 trillion).

The decline in the crypto market in the last few months is considered to be the cause of Coinbase's losses. As is known, during a bear market, crypto transactions and trading volumes have decreased significantly.

Launch Cointelegraph, this was the second straight quarterly loss for a crypto company and the biggest loss since Coinbase's listing on the Nasdaq Stock Exchange (Nasdaq) in April 2021.

The results, which also missed analyst expectations, were shared in Coinbase's Q2 2022 Shareholders' Letter on August 9.

“The current downturn is coming fast and intense, and we see customer behavior mirroring the market's past downturn", Coinbase wrote in its letter.

Coinbase said that the second quarter of the year was a “difficult quarter” with trading volume down 30% and transaction revenue down 35% consecutively.

“Both metrics are affected by shifts in customer and market activity, driven by macroeconomic factors and crypto credits", Coinbase wrote.

Despite the decline in transaction revenue, Michael Miller of Morningstar told Reuters in a report that while “Coinbase is not seeing mass migration on its platform [...], its users are becoming more passive in their cryptocurrency investments.”

Coinbase reported revenue of $802.6 million, which was a 45.1% drop from the previous quarter and a staggering 153.1% drop from the year-earlier quarter. Its net loss, which amounted to USD 1.1 billion, was mainly driven by USD 446 million in non-cash impairment charges caused by lower crypto asset prices in the second quarter.

However, Coinbase wrote that despite the economic downturn, the company is doing its best to adjust to fluctuating market conditions.

“Overall, it will take time to fully realize the financial impact of our actions, but we have lowered the full year range for Technology & Development and General & Administration fees,” Coinbase said.

As is known, last June Coinbase cut 18% of its employees. Coinbase is not the only company impacted by the crypto market downturn. Other crypto companies such as Robinhood, FTX, BlockFi, Crypto.com, and others have laid off employees, due to the market crash.