Coinbase reports strong revenue growth but anticipates a decline in trading volume in the upcoming quarter.

• Coinbase reported fourth-quarter earnings after the bell on Thursday.
• Despite an overall explosion in value in 2021, major cryptocurrencies saw a weak month in December, resulting in lower earnings.
• During the last quarter, Coinbase advised its investors that its stock should be viewed as a long-term investment due to the volatility of its business.

After the bell on Thursday, the company reported fourth-quarter earnings that exceeded analyst expectations. However, shares fluctuated after the report, ending down about 5% in extended trading following an executives' call with analysts.

Here are the key numbers:

• According to a Refinitiv survey of analysts, the actual earnings per share (EPS) was $3.32, which exceeded the expected EPS of $1.85.
• According to Refinitiv, the actual revenue was $2.5 billion, which exceeded the expected revenue of $1.94 billion.

The company predicted that retail monthly transaction users (MTUs) and total trading volume during the first quarter would be lower than the prior period due to decreased crypto asset volatility and a 20% decrease in crypto market capitalization quarter to date. The decline in market cap is driven by macroeconomic factors like geopolitical instability and the Federal Reserve signaling a tightening of financial conditions, Coinbase said.

Coinbase anticipates lower revenue from subscriptions and services in the current quarter due to declining crypto asset prices.

In the prior quarter, MTUs on Coinbase increased from 7.4 million to 11.4 million, while there was a decline in MTUs between the second and third quarters.

In the fourth quarter, the company's net income doubled to $840 million compared to the previous quarter, which was several times higher than the year-earlier quarter, where it reported $177 million.

Despite a strong year in value, major cryptocurrencies experienced a weak month in December. Investors attributed the slowdown to concerns about energy consumption and macroeconomic factors, including the rise of the Covid-19 omicron variant.

During a call with analysts, CEO Brian Armstrong refuted the notion that the cryptocurrency industry is experiencing a new "crypto winter," stating that the shift in significant use cases of cryptocurrency will lead to a different outcome compared to previous cycles of crypto winters and summers.

Armstrong stated that he does not anticipate it to be as significant as previous crypto winters.

Coinbase advised investors in the last quarter that its stock should be viewed as a long-term investment due to the volatility of its business.

In recent weeks, the reality has been shown that major cryptocurrencies, including bitcoin, have fallen amid concerns that Russian troops may invade Ukraine. This has caused some analysts to question whether bitcoin can act as a safe-haven currency during times of geopolitical instability.

Coinbase informed its shareholders in a letter that 2022 would likely bring uncertainty to its business.

The company stated that the uncertainties of 2022, including global macroeconomic challenges, volatile crypto asset prices, and increasing interest rates and inflation, make it challenging to predict the future of their business.

On the other hand, it was stated that there is an increase in opportunities and adoption of cryptocurrency.

Coinbase's CFO, Alesia Haas, stated that while the company's stock movements are mainly influenced by changes in cryptocurrency prices, investors should consider the diversification of its platform. She emphasized that Coinbase is introducing an NFT platform and that NFT prices and volume are less related to other crypto assets.