The erratic price swings of crypto assets were observed earlier this week by TechCrunch’s Equity podcast, which also forecasted Coinbase’s results later this week may either simplify or complicate the future for firms in the web3 ecosystem. The reasoning behind this was that if Coinbase released solid figures, it may allay some worries about a new crypto winter. That did not occur. Following the release of Coinbase’s first-quarter financial report last night, the company’s already weak price fell even more, pushing its shares below the $100 per-share threshold. That is much less than the stock’s previous year’s record high of $368.90.
The opening price of Coinbase’s shares today is merely $54.66, down 25% from yesterday’s closing. We’ll look at Coinbase’s numbers and what went wrong with its company in the first quarter this morning as UST burns and other crypto assets, including the recently created ApeCoin, experience intense selling pressure.
Any criticism of the business’s performance will be dismissed by crypto bulls as a hiccup in the overall development of cryptocurrencies. For the rest of us, the research serves as a helpful lens for assessing the consumer crypto market’s current position. Move along! Big losses result from fewer users and increased expenditures. In comparison to the same period last year, Coinbase’s first-quarter sales fell by 27% to $1.17 billion, while operational costs more than doubled to $1.72 billion.
The company’s substantially higher workforce — 4,948 full-time employees in the first quarter, up from 3,730 at the end of 2021 and 1,717 at the end of Q1 last year — contributed to the significant increase in spending. Coinbase looks to be plagued by a number of significant problems, since it also recorded lower revenue than it did in the fourth quarter.
After one of the (what was meant to be) biggest stablecoins, TerraUSD (UST), depegged from its $1 value and plunged as much as 70% to 29 cents early this morning, the cryptocurrency market has been unusually turbulent over the previous few days. In an attempt to right the ship, Do Kwon, the creator of Terraform Labs (TFL), the company that created UST, the cryptocurrency Terra (LUNA), and Luna Foundation Guard (LFG), tweeted an update on the situation early this morning.