Coinbase Tells Bloomberg 2022 Revenue Will Fall 50% Or More

Coinbase (NASDAQ: COIN) Chief Executive Brian Armstrong told Bloomberg on Wednesday that the cryptocurrency exchange's revenue could be cut in half this year or less than half as headwinds significantly impact the company.

Declining cryptocurrency prices and the collapse of FTX have hit crypto investor confidence in 2022. Coinbase shares have tumbled 83% this year and 85% in the last 12 months, while it declined 2.7% during Wednesday's session.

“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,” Armstrong told Bloomberg's David Rubenstein Show.

In addition, the publication said a Coinbase spokesperson, after the interview, stated that they expect revenue in 2022 to be less than half of 2021 revenue.

With crypto prices down already this year, the FTX collapse deepened investor concerns and also hit other companies with exposure to the failed crypto exchange. 

Despite the pessimism about the crypto industry in general, nine out of 19 analysts have a Buy rating on Coinbase, according to TipRanks, with seven assigning the stock a Hold rating and three a Sell rating.

On Monday, Atlantic Equities analyst Simon Clinch cut the firm's price target on Coinbase to $46 from $67, maintaining a Neutral rating on the shares. 

The analyst stated that he believes the “shocking collapse” of cryptocurrency exchange FTX “could be the pinnacle event that extends the duration and downside risks of the prevailing crypto winter.”

In addition, Clinch declared that the crypto industry is now “following a similar path to technology stocks in the aftermath of the dotcom bubble in the late 1990s/ early 2000s.”

However, while Clinch stated that Coinbase is well-positioned to “both survive and benefit from these events,” he also explained that the “overwhelming headwinds” from a prolonged crypto winter have resulted in him lowering Coinbase's forward estimates significantly.