Coinbase Global Inc (NASDAQ:COIN) chief executive Brian Armstrong was decidedly pragmatic regarding his cryptocurrency exchange’s short-term prospects in a recent interview with Bloomberg’s David Rubenstein.
“Last year in 2021, we did about US$7bn of revenue and about US$4bn of positive EBITDA, and this year with everything coming down, it’s looking… about roughly half that or less,” said Armstrong, reinforcing what the market likely already knew.
In fact, Armstrong’s full-year revenue prediction, which was in line with analysts’ expectations of US$3.2bn, is closer to 40% of 2021 revenues.
Mainly tailored to institutional investors, the Coinbase exchange continues to get battered by an endless string of crises that has plagued the crypto markets this year.
Read more: Coinbase reportedly subject to SEC investigation into unregistered securities
On top of the two-trillion-dollar market rout in May and the more recent collapse of former exchange rival FTX, Coinbase has contended with insider trading controversies (albeit levelled at former executives no longer involved with the firm).
Furthermore, renowned options trader Nassim Taleb called the company “worthless” in a November 27 Tweet, while largely unfounded bankruptcy rumours also dogged the firm.
Disclaimer: Headlines are misquoting me on $COIN Coinbase. I said nothing abt their holdings & risks of blowup, no analogy to FTC. My point is that they are cash-flow negative, w/a grisly future (even if crypto come back) & OWNERS have been getting out. The company is worthless.
— Nassim Nicholas Taleb (@nntaleb) November 27, 2022
Given the fact that Nasdaq-quoted COIN shares are down over 80% year to date, Taleb’s comments are not totally unfounded.
As with all other digital asset exchanges, Coinbase’s revenues are entirely dependent on the direction of the crypto markets.
Recovery there would help to restore Coinbase’s battered bottom line, but unfortunately, the jury is still out on where the crypto markets are heading in 2023.
Armstrong on FTX
Coinbase head Brian Armstrong also discussed with Bloomberg the collapse of former exchange rival FTX, suggesting its demise was the result of “massive fraud” as opposed to former FTX head Sam Bankman-Fried’s narrative of simple mismanagement.
“It appears that they took customer funds from their exchange and actually commingled them or moved them into their hedge fund and then ended up in a very underwater position,” Armstrong said. “And that was, I believe, against their terms of service and against the law.”
COIN shares fell another 2.7% to US$41.26 on Thursday December 8.