Coinbase generated $2.5 billion in total revenue during the fourth quarter of last year, up from $585.1 million a year earlier, according to its latest earnings report.
Trading volumes increased more than 67% to $547 billion during the quarter ended December 31, according to Coinbase Global, Inc. shareholder letterthe company acknowledged that a significant portion of this volume, around 32%, was from retail traders attracted by the volatility of the exchange’s altcoin selection.
“The sequential increase in retail turnover was primarily driven by higher levels of volatility, as well as strong consumer interest in a wider range of cryptocurrency assets,” the company said in a statement. declaration.
Another crypto winter?
However, Coinbase added that it believes growth in monthly retail transaction users and total transaction volume will slow this quarter compared to last.
While Coinbase CEO Brian Armstrong doesn’t believe the industry is entering a new “crypto winter,” he does emphasize the growing use cases of cryptocurrencies, which could be one of the reasons we are seeing the changes we are seeing. with cryptocurrencies.
“I don’t expect it to be that pronounced over time,” Armstrong said, referring to previous crypto winters.
“We enter 2022 with even more unknowns, which makes our business even more difficult to predict,” the company wrote, pointing to “global macroeconomic headwinds” in addition to unpredictable crypto prices, rising interest rates and inflation.
Investment in Altcoin
According to the report, altcoins accounted for 68% of trading volume in the fourth quarter, which reflects a strategic decision the company made last year to list more of them.
Armstrong has pushed to offer all coins deemed legal in an effort to alleviate the impact of Bitcoin’s volatility on revenue and earnings. After seeing competitors gain market share by increasing their coin listings, last year the company added 95 coins to its trading portfolio, including retail favorite Shiba Inu (SHIB) in September and 70 coins to its escrow service.
Alesia Haas, the company’s chief financial officer, said during the company’s earnings call that Coinbase plans to continue expanding its coin offering. Additional diversification could make subsequent results even less volatile, she added.
“Trading is going somewhere, it just goes into different pockets of the ecosystem,” Haas he said. “We think this will reduce volatility.”
Earlier this month, Coinbase announced that it would increase its headcount by 2,000 next year. Trading on the platform briefly skyrocketed after its commercial appeared during the Super Bowl.
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