© Reuters. FILE PHOTO: A smartphone with the Coinbase logo and a representation of cryptocurrencies placed on a keyboard in this illustration taken June 8, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
By Hannah Lang
(Reuters) -Cryptocurrency exchange Coinbase (NASDAQ on Thursday beat revenue estimates for the third quarter but saw trading volumes decline for the second straight quarter, sending the company’s shares tumbling in off-trade trading. schedule.
Trading volumes on the cryptocurrency exchange in the third quarter amounted to $11 billion, compared to $26 billion a year earlier, reflecting a similar drop in the previous quarter ending June 30.
Total revenue in the three months ended Sept. 30 was $674.1 million, compared with analysts’ estimate of $653.19 million, according to LSEG data.
Shares of the crypto exchange fell more than 4% in extended trading following the results, as investors weighed declining trading volumes.
“While we remain in a bear market with the lowest volatility we’ve seen in years, Coinbase is financially healthy,” Coinbase CEO Brian Armstrong said in a post-earnings call with analysts.
Investor sentiment towards cryptocurrencies has been lukewarm this year after a series of high-profile crashes in 2022 sparked more than $1 trillion in outflows from the sector.
The decline in trading volumes comes as Coinbase continues to fight the US Securities and Exchange Commission (SEC), which sued it and rival Binance in June, alleging that it traded at least 13 crypto assets that are values without registering them with the regulator. Both have denied the accusations.
In its previous earnings call, Coinbase Chief Legal Officer Paul Grewal said he expects Coinbase to prevail in the case.
In its letter to shareholders, Coinbase said it generated about $105 million in total transaction revenue in October as the price of bitcoin – the world’s largest cryptocurrency – enjoyed a rebound, but the company urged caution when extrapolating those results.
