Coinbase Global Inc (NASDAQ:COIN) saw revenues fell short of expectations whilst Bitcoin and Ethereum prices rose consistently through the third quarter.
Shares in the crypto exchange slumped in after-hours dealing following the release of its third-quarter results.
Revenue totalled US$1.23bn for the quarter, missing consensus analyst expectations for US$1.61bn, whilst profit was marked at US$406mln but was better than the US$380mln forecast in the market and quarterly earnings amounted to US$1.62 per share, 10% shy of expectations.
In a statement, the New York listed crypto exchange said it is “not a quarter-to-quarter investment, but rather a long-term investment in the growth of the cryptoeconomy”, whilst noting that its financial performance is driven by activity levels and volatility in the market.
“While we entered Q3 with softer crypto market conditions, driven by low volatility and declining crypto asset prices, market conditions improved meaningfully later in the quarter which we have continued to see into early Q4,” Coinbase said.
“This backdrop led to global crypto spot trading volumes declining 37% in Q3 as compared to Q2, however, Coinbase outperformed the market with total trading volumes of $327 billion, a 29% decline in the same period.
“We have consistently indicated that volatility is a key factor influencing our transaction revenue. Q3 illustrates this point.”