Coinbase Global Inc (NASDAQ:COIN) stock fell 4.25% (As on Nov 10, 11:01:40 AM UTC-4, Source: Google Finance) after the company missed the topline estimates whilst Bitcoin and Ethereum prices rose consistently through the third quarter. Coinbase said monthly transacting users on its platform reached 7.4 million, down from 8.8 million in the second quarter. 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. The company had entered Q3 with softer crypto market conditions, driven by low volatility and declining crypto asset prices, however the market conditions improved meaningfully later in the quarter. This backdrop led to global crypto spot trading volumes declining 37% in Q3 as compared to Q2, however, Coinbase outperformed the market with total trading volumes of $327 billion, which represents a 29% decline in the same period. At the same time, in September, Coinbase has had to shelve its plans for Lend, which was supposed to let users earn interest on coin holdings, due to pressure from the Securities and Exchange Commission.
Meanwhile, Coinbase is also diversifying its services, with plans to launch derivatives as well as a platform for trading non-fungible tokens. The NFT business could prove highly lucrative: Revenues of established marketplaces like OpenSea have exploded, and OpenSea takes a 2.5% cut of transactions. In recent weeks, analysts said Coinbase got benefited from listing the Shiba Inu meme token, popular with investors, in September. That, combined with a bull market in crypto that’s pushing more investors to step in, has led to a surge in downloads of Coinbase’s main mobile app. It’s also having traction with institutional investors, signing up clients like PIMCO
COIN in the third quarter of FY 21 has reported the adjusted earnings of $406 million, beating the analysts’ estimates for the adjusted earnings of $380 million. The company had reported the adjusted revenue of $1.23 billion in the third quarter of FY 21, missing the analysts’ estimates for revenue of $1.61 billion.
On the other hand, recently bitcoin hit a new all-time high of $68,000, and ethereum set a new record, topping $4,800. Coinbase said in the report that bitcoin accounted for 19% of trading volume, and ethereum accounted for 22%. The remaining 59% came from other crypto assets, an increase from 50% in the second quarter.