Coinbase Shares Drop as Company Misses Estimates for Q3

Coinbase was one of the most watched companies this week after reporting third quarter financial results that did not impress Wall Street.

The company reported weather than expected revenue for the quarter as well as the number of monthly transacting users dropping from the previous quarter.

The largest cryptocurrency exchange in the United States saw its shares drop over 13% in after-hours trading on Tuesday.

This is also the week that both bitcoin and ethereum raced to new highs.

For the third quarter, here is how Coinbase fared in relation to what analysts had been estimating.

Earnings came in at $1.62 while revenue hit $1.31 billion. This was lower than the $1.57 billion analysts expected according to Refinitiv.

Coinbase said monthly transacting users fell from the prior period, dropping to 7.4 million from 8.8 million in the second quarter. The number was however up from 6.1 million a year earlier.

Trading volume fell to $327 billion from $462 billion in the previous quarter.

“As our year-to-date results have clearly demonstrated, our business is volatile,” the company said in its shareholder letter.

“Coinbase is not a quarter-to-quarter investment, but rather a long-term investment in the growth of the cryptoeconomy and our ability to serve users through our products and services. We encourage our investors to take this point of view.”

It was on Monday that bitcoin hit a new all-time high of $68,000, and ethereum set a new record, topping $4,800.

Coinbase said in the report that bitcoin accounted for 19% of trading volume, and ethereum accounted for 22%. The remaining 59% came from other crypto assets.

Assets on the platform grew to $255 billion from $180 billion at the end of June.

Facebook recently said it hired Coinbase to deal with logistics for its new digital wallet for cryptocurrencies.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.