Leading cryptocurrency exchange Coinbase anticipates a sharp decline in revenue this year. As a result of falling prices and the collapse of a competing exchange FTX, investors’ confidence has been shaken, according to Coinbase CEO Brian Armstrong. This could result in a revenue decrease of almost 50% or more in 2022 in comparison to the previous year.
The Ongoing FTX Fiasco
The sudden demise of the FTX empire brought an end to what was already a terrible year for the cryptocurrency market, with investors fleeing as the prices of some of the most actively traded tokens fell.
Shares of Coinbase have lost more than 80% of their value in 2022, and the company’s third-quarter revenue is only one-fourth of what it had been in the last three months of 2021, when Bitcoin reached its all-time high.
Brian Armstrong was quoted saying,
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
Coinbase’s Declining Revenue
Based on adjusted EBITDA, a measure of earnings that eliminates specific expenditures like interest and depreciation, Coinbase has stated that, it may see a loss of no more than $500 million in 2022.
Read More: Coinbase Reports $1 Billion Loss in Q2
Although the business hasn’t previously provided a full-year revenue prediction, Armstrong’s estimate is in line with the $3.2 billion predicted by analysts.
The FTX controversy added to the industry’s existing dark mood, which was already shrouded by the bankruptcies of prominent crypto firms like the Celsius Network and 3AC. A more recent one being BlockFi Inc., which reportedly was backed and supported by FTX itself.
Read More: BlockFi Files For Bankruptcy Amid FTX Contagion Effect
Brian Confident In Crypto’s Future
According to Armstrong, the CEO intends to continue supporting the sector with government authorities despite the consequences from FTX and projected that legislation pertaining to cryptocurrencies may still be passed over the course of the coming year.
Read More: Kazakhstan Passes Stringent Crypto And Mining Bills
In the coming months, stablecoin regulations, rules for centralized exchanges and custodians, and definitions of commodities and securities should all be given great priority, according to Armstrong.