Coinbase posts $557 million loss in Q4 2022

The exchange posts its fourth-quarter loss, symbolic of the failed crypto year in 2022.

The exchange posts its fourth-quarter loss, symbolic of the failed crypto year in 2022.

The largest U.S. crypto exchange Coinbase announced new quarterly results for the past year on the evening of February 22. For the fourth straight loss of $557 million, it reflects the failed crypto year of 2022. The total loss in 2022 comes to $2.6 billion. According to the figures, trading volume also fell by 75 percent versus the prior year. Trading volume is also seen as the exchange’s biggest source of revenue.

Lower revenue from HODL

As a Coinbase spokesperson explained, this result was due to lower sector volatility tied to cautious crypto investors. They shifted more toward "HODLing" rather than active trading. Additionally, confidence in crypto exchanges took a hit after the FTX bankruptcy.

The exchange’s better-than-expected revenue was only a small consolation. Coinbase generated $629 million compared to estimates of $581 million. Yet this is far from the $2.5 billion in revenue in the same quarter of the prior year, when the bull market was still in full swing. Trading activity on the exchange has recently ticked up again with the rise of various cryptos in recent months.

Preparing for different trading scenarios

Meanwhile, the company said it is prepared for "different trading scenarios in 2023". Over the past year it has already cut more jobs to curb costs. The company is also gearing up for increasing sector regulation. Coinbase has complied with this, but also noted that it would take legal action if the various cryptocurrencies on the platform had to be registered as securities.