Coinbase Global is expected to announce a revenue increase and a return to profitability for the third quarter of 2024, but the growing investor caution may overshadow these gains.
As the largest crypto exchange in the U.S., the company’s revenue is anticipated to double for the second consecutive quarter, with analysts predicting $1.25 billion in revenue and net income of $118 million.
However, despite positive projections, the company has struggled to attract retail traders back into the market, given the ongoing volatility in cryptocurrencies.
Coinbase Fails to Win Investors Confidence
Although Coinbase’s shares have risen by approximately 27% this year, they lag behind Bitcoin’s 70% gain during the same period. The stock remains around 40% below its peak from the 2021 crypto bull market.
A significant factor in this discrepancy is declining retail investor interest, which has seen a drop as Bitcoin’s value has stayed relatively flat. According to Google Trends, searches for “Bitcoin” have hit their lowest point in over a year.
Crypto.com has also outpaced Coinbase in North American trading volumes, highlighting competitive pressures. As reported by UnoCrypto earlier, data shows Crypto.com’s monthly spot trading volume surged to $134 billion in September, compared to Coinbase’s $46 billion out of North America’s total $183 billion in crypto trading volume.
Meanwhile, Coinbase’s monthly active app users decreased by 6% year-over-year in Q3, while Binance saw a 20% increase in app engagement.
The Future for Coinbase
Despite these challenges, Coinbase’s efforts to diversify revenue may bolster its resilience. The exchange has expanded its institutional trading and non-trading services, with half of its second-quarter revenue sourced from non-transactional activities.
This diversification is critical as the company faces regulatory hurdles in the U.S., where it is currently in litigation with the Securities and Exchange Commission.
Looking ahead, the outcome of the upcoming U.S. presidential election could have significant implications for Coinbase and the broader crypto industry, potentially influencing regulatory policies and impacting the exchange’s ongoing legal challenges.