Coinbase - Hampered by Crypto Winter?

As most of us are aware that it is currently a long crypto winter, what does that spell to Coinbase's latest results and future prospects?

Total revenue for Q4'22 is USD 604.9 million, which is lower by 76 YoY. As crypto winter hits hard, transaction revenue from both consumer and institutional has reduced significantly.

This is partially mitigated and supported by stronger interest income and relatively stable blockchain rewards, derived from its subscription and service revenue.

A deeper dive into the trading volume of both consumer and institutional shows a 50% drop. At the euphoria phase of the crypto rally back in Q4'21, consumer trading volume takes up almost 32% of Coinbase's total transaction volume.

During the frenzy, riskier crypto assets were the major bulk of the trading volume, taking up 68% of the trading volume.

Fast forward to the latest quarter, it has dropped to 33%, while relatively safer cryptos like Bitcoin and Ethereum collectively contributed to 68% of the trading volume.

For a company in the crypto business, Coinbase does hold quite a significant amount of USD. More than 75% of its USD is in corporate cash and money market funds. Around 16% of it is in the form of USDC.

Coinbase share prices are up by 85% YTD. Will this slight correction make you interested in investing?

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