Coinbase CEO expects 50% decline in annual revenue in 2022

Coinbase chief executive Brian Armstrong believes the crypto exchange’s annual revenue in 2022 is set to decline by 50% or even more as compared to last year, when it posted $7 billion in revenue. 

“Last year in 2021 we did about $7 billion of revenue and about $4 billion of positive EBITDA, and this year with everything coming down it’s looking, you know, about roughly half that or less,” Armstrong told Bloomberg News in a television interview.

Last month, the crypto firm said in a letter to shareholders that it is expecting a net loss of $545 million in adjusted earnings before interest, taxes, depreciation, or amortization (EBITDA) in 2022. Its revenue from transactions fell 44% quarter on quarter (QoQ) while subscription and services revenue fell 43% in Q3 2022. 

Coinbase attributed the poor performance in Q3 to the economic downturn and crypto market crash, which impacted the trading volumes on the crypto exchange significantly. 

Last month, Coinbase also announced fresh job cuts in its recruitment and onboarding teams. Before that, in June, the company had announced 18% job cuts, impacting around 1100 workers, as part of a multi-step strategy to survive the economic downturn. 

Further, Armstrong said that the legislation to regulate crypto is expected next year. He also pointed out that the collapse of FTX was due to a “massive fraud” and not mismanagement or accounting mistakes. 

“It appears that they took customer funds from their exchange and actually commingled them or moved them into their hedge fund and then ended up in a very underwater position,” he added. 

The Crypto industry suffered a major setback in May after the value of stablecoins TerraUSD (UST) and LUNA fell by 82.19% to reach $0.6 and by 99% to reach $0.02. 

This was followed by the collapse of the world's second biggest crypto exchange FTX in October, which has plummeted the industry further into crisis. The value of Bitcoin dropped to a new low of $16,000, which as per CoinMetrics is the lowest since November 2020. 

Early this week, Eric Robertsen, global head of research at Standard Chartered, forecasted that Bitcoin’s price might slide further to $5,000 next year.