- According to Brian Armstrong, CEO of Coinbase, investor trust has been rattled.
- Armstrong’s estimate is in line with analysts’ projections of $3.2 billion.
Coinbase, a major cryptocurrency exchange, expects sales to drop significantly in 2022. According to Brian Armstrong, CEO of Coinbase, investor trust has been rattled. Due to declining prices and the bankruptcy of a competitor exchange, FTX. As a consequence, it’s possible that 2022 revenues may drop by as much as half from 2021 levels.
An already bad year for the cryptocurrency market ended abruptly as the FTX exchange collapsed. Sending investors scrambling as the value of some of the most regularly traded tokens plummeted.
Tough Times Ahead
Coinbase stock has been down over 80% this year. And the company’s revenue in the third quarter is about a fraction of what it was in the fourth quarter of 2021 when Bitcoin was at its all-time high. Moreover, Coinbase has projected that it may lose no more than $500 million in 2022 using adjusted EBITDA. It is a measure of profitability that excludes certain costs like interest and depreciation.
While the company has not offered a full-year sales forecast in the past, Armstrong’s estimate is in line with analysts’ projections of $3.2 billion.
The FTX incident further darkened an industry already plagued by the failures of many major cryptocurrency companies, including the Celsius Network and 3AC. Moreover, BlockFi Inc. is a more recent example that has been said to have received funding and assistance from FTX. The list is long with multiple firms now revealing their exposure to FTX.
Armstrong claims that, despite the fallout from FTX, the exchange plans to maintain government backing for the industry and has predicted that cryptocurrency-related legislation may still be approved this year.
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