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Coinbase CEO Sees Revenue Falling 50% or More on Crypto Rout (bloomberg.com) 32

Posted by msmash from the tough-luck dept.
Coinbase Chief Executive Officer Brian Armstrong said the cryptocurrency exchange's revenue is set to be cut by half or more this year as declining prices and the collapse of rival FTX rattle investors' confidence. From a report: The rapid downfall of FTX capped what was already a brutal year for the cryptocurrency industry, with speculators in retreat as prices of some of the most frequently traded tokens tumbled. Coinbase's shares have fallen more than 80% in 2022 and the company's third-quarter revenue was about one-fourth of what it was during the last three months of 2021, when the price of Bitcoin peaked.

"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 said in a wide-ranging interview on Bloomberg's "David Rubenstein Show: Peer-to-Peer Conversations," when asked about the company's revenue. In additional comments provided after the interview, a Coinbase spokesperson further clarified that they expect 2022 revenue to be less than half of 2021 revenue. Coinbase has previously indicated it may see a 2022 loss of no more than $500 million based on adjusted EBITDA, a measure of earnings that excludes certain costs like interest and depreciation.
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Coinbase CEO Sees Revenue Falling 50% or More on Crypto Rout More

Coinbase CEO Sees Revenue Falling 50% or More on Crypto Rout

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  • Full collapse is eminent. (Score:5, Insightful)

    by rsilvergun ( 571051 ) on Thursday December 08, 2022 @10:53AM (#63113302)
    The major exchanges are propping up the market. As their revenue collapses two things happen. First, they can't service their debt. Second creditors will start wanting to call in loans instead of extending them. High interest rates mean they can't just borrow more money from wealthy idiots with too much money on their hands. Those wealthy idiots are a little more selective at the moment.

    What's been happening is exchanges go belly up and stop pumping Bitcoin's price. Then the price slides and bites into everybody's profits, causing another exchange to go down and drop the price of Bitcoin causing less profits causing another exchange to go down....

    If this all sounds like a pyramid or ponzi scheme that's because it is.

    There's enough money in the system from drugs, ransomeware and money laundering it's slowed the descent. So that instead of a "pop" it's more like letting the air out of a balloon.
    • Great news for the atmosphere! Does the popularity of crypto with our criminal dregs mean it will not finally be wooden staked in the heart?
  • Companies can exclude certain expenses from their EBITDA calculation that are significant and meaningful, such as depreciation and amortization. Not just interest, which by and large has been cheap these past years, but principal loan repayments -- those are considered 'amortization'. So your company can take on huge debts be looking at $1B of more outflows compared to the previous year and it won't be reflected in the EBITDA. (disclaimer: not an accountant, this is my best understanding as a layperson)

    Wh

    • Financial arguments *are* made with net income as well as with EBITDA. Both numbers are meaningful. The change in the ITDA numbers over time are largely due to factors *external* to the business. The EBIDTA numbers are largely related to *internal* factors. The ITDA portion is *easier* to improve.

      If I sold a billion dollars of products last year that cost me $400k to manufacture and other operating costs (salaries, rents, repairs to equipment, et cetera) were $200k, I have a $400k profit. Let's say I

      • Re: (Score:2)

        by DavenH ( 1065780 )
        Great examples and arguments. Presumably when you say billion you mean million, but everything else makes sense.
        • LOL yeah, I meant million. Although I wouldn't mind having an extra billion dollars laying around.

  • Sorry that your ponzi scheme only seems to work under an overheated economy. You'll have to seek out more recession-proof scams if you wish to maintain the lifestyle that you've become accustomed to.

  • The tone of crypto articles is ridiculous (Score:3)

    by Ed Tice ( 3732157 ) on Thursday December 08, 2022 @11:14AM (#63113354)
    They are written as if crypto-currency is an actual asset. If one were to replace the word "crypto" with say "aluminum," you would get a well-written (albeit not necessarily accurate) article about a real asset. But crypto is not a real asset. And crypto doesn't have exchanges. Exchanges are highly-regulated institutions that trade things that have actual value and investors are protected.

    The article should instead say "As the various ponzi schemes and frauds known as crypto-currency continue to collapse, those who have built businesses facilitating crypto-currency transactions (such as drug deals, murder-for-hire, money laundering and the like) under a very thin veil of plausible deniability aren't able to make money anymore."

    That would be a non-misleading FS.

    • They are written as if crypto-currency is an actual asset.

      For the most part, if you actually had a stockpile of aluminum, you'd have something you could always sell. Short of physics-breaking shenanigans like a megaton sized asteroid made of pure refined aluminum crashing to earth without burning(oxidizing) the asteroid, you can always sell a pile of aluminum. Exact price may vary, but you'll get something.

      Because there are people looking to do actual uses with the stuff, and it costs real resources to make, physical processes that don't scale beyond a certain a

  • Fake currency becomes fucked currency. Film at 11.

  • Gotta say I give less than 2 $hits for all these crypto idiots. I hope (and expect) they lose every penny they 'invested'.

  • Maybe they'll have to try working for a living, instead.

  • Oh No! (Score:2)

    by Duds ( 100634 )

    Anyway....

  • I refuse to be taxed on a fiat's value of my bits and bytes floating around in the cloud. I've pulled everything out of crypto now.

    • I refuse to be taxed on a fiat's value of my bits and bytes floating around in the cloud. I've pulled everything out of crypto now.

      So you can be taxed on its fiat value while it's being held somewhere else?

  • I bet he didn't pay for it with bitcoin but actual dollars he made from selling hype to the financially illiterate and desperate

    I hope his company burns to the ground, but I guess he's made his bucks so will get to live the rest of his life as an aristocrat

  • It is certainly a worrying trend for the industry as a whole that Coinbase's revenue is set to take such a hit this year.
  • It is certainly a worrying trend for the industry as a whole that Coinbase's revenue is set to take such a hit this year. It is a reminder of how quickly and drastically fortunes can turn in the crypto-sphere. It is important to remember, however, that this does not mean that the entire industry is doomed. There are still many opportunities to be had in the crypto sector, and there are still plenty of investors who have faith in the market. One way to take advantage of these opportunities is to use the late

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