Crypto Exchange Coinbase Down Over 70% Since Listing, More Pain Ahead

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Coinbases results came amid a sell-off of speculative assets from stocks to crypto across global markets.

Coinbase Global Inc. shares tumbled after first-quarter revenue missed estimates and the largest U.S. cryptocurrency exchange warned that total trading volume in the current quarter will be lower than in the first.

The company's shares fell about 16% after the close of regular trading. Monthly transacting users fell to 9.2 million, below an estimate of 9.5 million. First-quarter revenue slumped to $1.17 billion, while analysts were expecting revenue of $1.48 billion, according to Bloomberg data. 

“We continue to see the trading volume is weak, the macro headwinds is still here, what that means is trading volume may be stagnant over the next few months or so,” said Owen Lau, an analyst from Oppenheimer & Co. Inc., who has an “outperform” rating on the shares. “If they maintain these high investments, then they may not be able to maintain profitability this year. “

Coinbase's results came amid a sell-off of speculative assets from stocks to crypto across global markets. Bellwether Bitcoin is down more than 50% since its all-time high in November, pushing many retail traders to stay on the sidelines. Coinbase earns the bulk of its revenue from trading fees, and its shares have fallen to all-time lows -- down more than 70% from where they traded when the company went public a year ago.

Coinbase, which made its debut in the junk-bond market last year, also saw its notes drop in secondary. Its $1 billion of bonds due in 2031 fell 5.5 cents to 66.5 cents on the dollar, according to Trace pricing.

“We definitely see bear-market conditions, but it's hard to call it a winter yet,” Alesia Haas, chief financial officer, said in an