Coinbase Stock Drops 15% After Q1 Earnings Miss

Shares of Coinbase Global (COIN) are down 15% today after the cryptocurrency exchange’s first-quarter revenue missed estimates and management warned that trading volume in the current second quarter will be lower than in the first three months of the year.

Monthly transacting users fell to 9.2 million, below an estimate of 9.5 million. The company expects total trading volume in the current second quarter to be lower than in the first quarter, but its outlook for 2022 has been left unchanged.

Coinbase’s first-quarter revenue slumped to $1.17 billion U.S., while analysts were expecting revenue of $1.48 billion U.S., according to Refinitiv data.

Coinbase’s results come amid a selloff in speculative assets from stocks to cryptocurrencies. Bellwether Bitcoin (BTC) is down more than 50% since its all-time high last November, pushing many retail traders to the sidelines.

The crypto exchange’s business is highly volatile and suffers in a bear market. Coinbase earns the bulk of its revenue from trading fees, and its shares have fallen more than 70% from where they traded when the company went public a year ago.

Coinbase said it is diversifying its business to reduce its reliance on trading fees. The company’s staking product that allows users to put their coins into special yield-earning accounts continues to gain traction.

Coinbase said it is also working on launching cryptocurrency derivatives. Last week, the company opened its new marketplace for nonfungible tokens (NFTs), which are digital art connected to blockchain technology, but its uptake has been slow.