- Coinbase is forecasting a $3.5 billion decrease in its revenue from $7 billion in 2021.
- Coinbase head Brian Armstrong stated FTX’s commingling of customer funds was not mismanagement but a “massive fraud”.
- Coinbase CEO still believes that the crypto legislation might get enacted sometime in 2023.
Coinabase has a lot of eyes on it, being the second biggest cryptocurrency exchange in the world. But despite that title, the exchange is losing revenue left and right due to the crypto market crash triggered by FTX’s bankruptcy. But while Coinbase is looking at a loss, in the long run, Binance seems to have gained an advantage from FTX’s downfall in the short term.
Coinbase to face losses
Coinbase is looking at a plunge in its revenues this year due to the barrage of crash-triggering incidents that occurred throughout the year. During an interview, the crypto exchange’s CEO, Brian Armstrong, stated that FTX’s collapse played a critical role in this.
The fall of Sam Bankman Fried’s exchange and its 130 other companies’ bankruptcy shattered investors’ confidence. Consequently, they pulled back until the situation got better, which in actuality still hasn’t, resulting in Armstrong’s forecast. The CEO stated,
“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.”
The same was also verified by another Coinbase Spokesperson by Bloomberg, who clarified that 2022’s revenue is expected to be half of 2021. Even before Brian Armstrong’s statement, the company was looking at a possible loss beyond a decline in revenue. As per Chinese, based on the adjusted EBITDA, a loss of more than $500 million was on the table.
FTX’s demise and the subsequent bankruptcy have destroyed many organizations, including BlockFi, which filed for bankruptcy last month. Brian Armstrong commented on the same, saying Sam Bankman Fried’s company’s downfall was not the result of mismanagement or messy accounting but a “massive fraud”. Armstrong added,
“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, and that was, I believe, against their terms of service and against the law.”
But while Brian Armstrong is furious regarding Coinbase’s possible losses stemming from FTX, Binance seems to have taken advantage of it.
Binance gains users
As reported by FXStreet this week, Binance ended up noting a 30% increase in trading activity in the month of November. The crypto exchange market’s trading volume spiked by 23% to $705 billion last month and was led by Binance primarily.
Binance’s emergence as a key industry entity enabled the cryptocurrency exchange to note higher interest from users as well. Initiatives, including the Industry Recovery Initiative (IRI) and Proof of Reserves, played a crucial role in the same.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Prisma price tanks 25% after nearly $9 million exploit
Prisma Finance (PRISMA) is being exploited, and the attacker has so far pulled $9 million in Ethereum from the borrowing protocol. Prisma asked vault owners to take the necessary steps to protect funds from the ongoing attack in an official tweet on X.
Meme coins gain traction after SEC’s partial win in Coinbase lawsuit: DOGE, SHIB, BRETT, POPCAT, BODEN
US SEC pocketed a partial win in its lawsuit against Coinbase, ushering a correction in crypto prices on Thursday. Despite the broad pullback, prices of meme coins like Dogecoin, Shiba Inu and Solana-based BRETT, POPCAT and BODEN increased.
Ondo moves $95 million worth of OUSG assets to BUIDL as tokenized fund attracts $245 million since debut
Ondo Finance (ONDO) announced on Wednesday that it's shifting about $95 million worth of its OUSG's underlying assets to the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
XRP price stuck below $0.65 resistance, Ripple lawsuit could suffer from Coinbase defeat
XRP price falls slightly to $0.61 on Thursday after its landmark programmatic sales ruling in July, which gave Ripple a partial victory against the US SEC, failed to reverberate in a similar legal battle between the regulator and crypto exchange Coinbase.
Bitcoin: BTC may have recovered, but is it out of the woods?
Bitcoin’s (BTC) upward momentum has shown a significant decline for the past two weeks or so. This development led to a bearish signal on the weekly and an uncertain outlook on the monthly.