| From: Glenn Petersen | 10/14/2021 2:02:52 PM | | | | | | Coinbase Sees 1.4 Million Signups for New NFT Platform
The Coinbase NFT marketplace is seeing an “insane” amount of traffic as the number of users on the waitlist exceeds 1.4 million.
By Andrew Asmakov
Decrypt
2 min read
Oct 14, 2021
The waitlist for Coinbase NFT, a peer-to-peer marketplace for non-fungible tokens ( NFTs), has already seen over 1.4 million signups, and that’s in less than 48 hours since the San Francisco-based crypto exchange announced the imminent launch of the platform on Tuesday.
Slated to open before the end of the year, Coinbase NFT, according to the original announcement, “will make minting, purchasing, showcasing, and discovering NFTs easier than ever.”
“Just as Coinbase helped millions of people access Bitcoin for the first time in an easy and trusted way — we want to do the same for the NFTs,” the company said.
At press time, the waitlist counter for Coinbase NFT has reached 1,427,450 and with such a ratio of signups could be well on its way to surpass 2 million by the end of the day—provided technical issues don’t slow the process down.
Waiting list of newcomers to Coinbase’s NFT platform. Source: Coinbase
------------------------
“We are getting a LOT of signups - so grateful for all your interest,” Coinbase vice president of product Sanchan Saxena wrote on Twitter on Wednesday. “We are seeing insane loads on our servers and our team is working hard to get this resolved. Check back soon!”
Though there is little info regarding any fees the company may accrue from the new business, these “insane” numbers could turn into a hugely profitable new business for Coinbase.
Coinbase enters NFT race
OpenSea and Rarible are the NFT market’s current incumbents. The two were responsible for a combined $6.8 billion in trading volume in Q3 2021, with OpenSea contributing more than 99% to that figure, according to the latest report from blockchain analytics firm CoinGecko.
Data from DappRadar shows that over the past month, OpenSea has had a rolling 30-day average of 261,050 active users who have conducted a total of 2.49 million transactions worth $3.02 billion.
These are undoubtedly impressive numbers for the nascent NFT industry. Still, the booming DeFi sector dwarfs these figures, recently passing $216 billion in total value locked. With Coinbase and its user base of more than 68 million entering the scene, things could change dramatically.
Coinbase is also joined by major players Binance and FTX.
Coinbase Sees 1.4 Million Signups for New NFT Platform - Decrypt |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: Glenn Petersen | 11/9/2021 6:06:32 PM | | | | | | Coinbase shares drop after third-quarter revenue misses analysts’ estimates
PUBLISHED TUE, NOV 9 20214:07 PM EST
UPDATED 2 MIN AGO
Samantha Subin @SAMANTHA_SUBIN
CNBC.com
KEY POINTS
-- Coinbase reported weaker-than-expected revenue for the third quarter.
-- The number of monthly transacting users dropped from the prior period.
-- Both bitcoin and ethereum hit new all-time highs this week.
Coinbase, the largest cryptocurrency exchange in the U.S., reported third-quarter earnings after the bell on Tuesday and missed analysts’ estimates on revenue. The stock sank more than 13% in extended trading.
Here’s how Coinbase did compared with analyst estimates:
Earnings: $1.62 a share
Revenue: $1.31 billion vs. $1.57 billion consensus estimate, according to Refinitiv
Coinbase said monthly transacting users fell from the prior period, dropping to 7.4 million from 8.8 million in the second quarter. The number was up from 6.1 million a year earlier. Trading volume fell to $327 billion from $462 billion in the previous quarter.
“As our year-to-date results have clearly demonstrated, our business is volatile,” the company said in its shareholder letter. “Coinbase is not a quarter-to-quarter investment, but rather a long-term investment in the growth of the cryptoeconomy and our ability to serve users through our products and services. We encourage our investors to take this point of view.”
Much of the company’s success hinges on the performance of digital assets like bitcoin. Coinbase said in August it expected lower trading volume and monthly transacting users in the third quarter after crypto assets dipped during the summer.
On Monday, bitcoin hit a new all-time high of $68,000, and ethereum set a new record, topping $4,800. Coinbase said in the report that bitcoin accounted for 19% of trading volume, and ethereum accounted for 22%. The remaining 59% came from other crypto assets, an increase from 50% in the second quarter.
Assets on the platform swelled to $255 billion from $180 billion at the end of June. About 55% of that is from institutional investors with the rest from retail.
Coinbase held its stock market debut in April at $381 a share and was briefly valued at high as $100 billion, on a fully diluted basis. The stock sank below $221 in July but has rallied dramatically in the past month, closing on Tuesday at $357.39.
Net revenue more than quadrupled from a year earlier to $1.23 billion. However, it was down from over $2 billion in the second quarter. Coinbase said it expects retail monthly transacting users and total trading volume in the fourth quarter to be higher than in the third.
In September, the company scrapped plans to launch a crypto lending product after it revealed that the SEC planned to sue over the product. Also during the quarter, Coinbase announced plans to launch a marketplace to trade nonfungible tokens and allowed customers to deposit paychecks into their accounts.
Facebook, now known as Meta Platforms, recently said it hired Coinbase to deal with logistics for its new digital wallet for cryptocurrencies.
Coinbase (COIN) earnings Q3 2021 (cnbc.com) |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: Glenn Petersen | 2/24/2022 8:29:56 PM | | | | | | Coinbase posts big revenue beat but expects trading volume to fall in the first quarter
PUBLISHED THU, FEB 24 20224:11 PM EST
UPDATED 55 MIN AGO
Lauren Feiner @LAUREN_FEINER
CNBC.com
KEY POINTS
-- Coinbase reported fourth-quarter earnings after the bell on Thursday.
-- The earnings come after major cryptocurrencies saw a weak month in December, despite an overall explosion in value in 2021.
-- Coinbase warned shareholders during the previous quarter that its stock should be considered a long-term investment because its business is “volatile.”
Coinbase reported fourth-quarter earnings that beat analyst estimates after the bell on Thursday. Shares bounced around after the report. They were down about 5% in extended trading by the end of executives’ call with analysts.
Here are the key numbers:
Earnings per share (EPS): $3.32, versus $1.85 expected, according to a Refinitiv survey of analysts
Revenue: $2.5 billion, versus $1.94 billion expected, according to Refinitiv
The company predicted that retail monthly transaction users (MTUs) and total trading volume during the first quarter would be lower than the prior period. Coinbase attributed the change to decreased crypto asset volatility and a 20% decrease in crypto market capitalization quarter to date. Declining market cap is driven by macroeconomic factors like geopolitical instability and the Federal Reserve signaling a tightening of financial conditions, the company said.
Coinbase said it expects subscriptions and services revenue to be lower in the current quarter because of falling crypto asset prices.
MTUs jumped to 11.4 million in the prior quarter, up from 7.4 million in the third quarter; Coinbase saw a decline in MTUs between the second and third quarters.
It also reported net income doubled to $840 million in the fourth quarter compared with the prior period, or several times the year-earlier quarter, when it reported $177 million.
The report comes after major cryptocurrencies saw a weak month in December, despite an overall explosion in value in 2021. Investors blamed the year-end slowdown on concerns about cryptocurrency’s energy consumption and on macroeconomic factors like the rise of the Covid-19 omicron variant.
On the company’s call with analysts, CEO Brian Armstrong shot down the idea that the sector could be entering a new “ crypto winter,” which is essentially a bear market. Armstrong said that’s because of the change in significant use cases of cryptocurrency, which will make for a different result than earlier cycles of crypto winters and summers.
“I don’t expect it to be anything quite that pronounced over time,” Armstrong said, referring to previous crypto winters.
Coinbase warned shareholders in the previous quarter that its stock should be considered a long-term investment because its business is “volatile.”
That reality has been demonstrated in recent weeks as major cryptocurrencies like bitcoin fell amid concerns that Russian troops would invade Ukraine. The incursion has also led some analysts to question the idea that bitcoin could act as a safe-haven currency in times of geopolitical instability.
Coinbase did warn in its letter to shareholders that 2022 will continue to have a fair amount of uncertainty for its business.
“We enter 2022 with even more unknowns, which make our business all the more difficult to forecast,” the company wrote, pointing to “global macroeconomic headwinds” on top of unpredictable crypto asset prices, rising interest rates and inflation.
But, it said, on the other hand, that it sees increased opportunities and adoption of cryptocurrency.
CFO Alesia Haas said that while Coinbase’s stock moves have been largely tied to changes in cryptocurrency prices, the company hopes investors ultimately take into account the ways it is diversifying its platform and decouple the two factors. She noted that Coinbase is launching a non-fungible token (NFT) platform and that NFT prices and volume are “less correlated with other crypto assets.”
Coinbase (COIN) earnings Q4 2021 (cnbc.com) |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| To: Glenn Petersen who wrote (63) | 4/15/2022 5:55:00 AM | | From: daChosen1 | | | | I have some speculations about Coinbase's future revenues. There is something interesting to note about how they make money. See how the majority of volume comes from institutional traders, while the majority of the revenue stems from the retail clients themselves. This leads to a perhaps self-evident fact that institutional teams are the ones doing the most volume, thus have the most impact to the price and momentum, and the bill is picked up by retail consumers of crypto, typically the everyday investor. In a normal enviourment, the big boys don't trade and lose money, the small retail investors do. So with the diminished trading volume and participation from retail investors, it doesn't look good at all for investors of Coinbase.
 |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: Glenn Petersen | 5/10/2022 5:39:45 PM | | | | | | Coinbase revenue drops 27% from a year ago, stock slides
PUBLISHED TUE, MAY 10 20224:23 PM EDT
UPDATED 9 MIN AGO
MacKenzie Sigalos @KENZIESIGALOS
CNBC.com
KEY POINTS
-- Coinbase reported first-quarter earnings after the bell on Tuesday.
-- The earnings come amid a major sell-off across the crypto market.
-- Coinbase earnings missed analyst estimates and shares fell as much as 19% in extended trading.
Coinbase reported first-quarter earnings that missed analyst estimates after the bell on Tuesday. Shares fell as much as 19% in extended trading, before rebounding. The stock is now down about 14% after hours.
Here are the key numbers:
Loss per share (EPS): $1.98
Revenue: $1.17 billion, versus $1.48 billion expected, according to Refinitiv
Before the report, the stock had lost more than 60% of its value since late March, as a broader slide in tech stocks and the value of cryptocurrencies hit Coinbase particularly hard. Bitcoin dropped below the symbolic price threshold of $30,000 on Monday.
Overall, usage declined from the fourth quarter. Retail monthly transaction users (MTUs) fell to 9.2 million, down from 11.4 million in the fourth quarter, while total trading volume dropped from $547 billion in Q4 to $309 billion.
The company’s revenue dropped 27% from a year ago, and it also reported a net loss of $430 million in the first quarter.
But Coinbase doesn’t appear to be worried about its long-term prospects. The company doubled down on an argument that it has made before, reminding shareholders that its stock should be thought of as a long-term investment due to the volatile nature of cryptocurrency price moves.
“We believe these market conditions are not permanent and we remain focused on the long-term,” the company wrote in a letter to shareholders accompanying its earnings release. It also said that it’s focusing on the next generation of crypto opportunities beyond trading.
“While we continue to invest and enhance our core investment platform, the application era of crypto is upon us, led by NFDs and decentralized finance, and we are increasingly focusing our efforts on these market opportunities.”
Increased spending also helped to drag down the company’s bottom line.
General and administrative expenses were $414 million, up 39% compared to the prior quarter. Coinbase attributed the rise to higher expenses related to full-time and contractor-related headcount. The purpose of that spending, according to the company, was to “invest to strengthen and scale our customer support, legal, compliance, and business support functions.”
Overall operating expenses came in at $1.72 billion, outstripping revenue for the first time since the company began reporting finances publicly.
While Coinbase had previously disclosed plans to increase headcount, operating expenses jumping nearly 70% in six months does suggest the company is still spending like it is in hypergrowth phase, even though users and transaction volume dipped between quarters.
Coinbase (COIN) earnings Q1 2022 (cnbc.com) |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: Glenn Petersen | 5/11/2022 10:43:05 AM | | | | | | Coinbase earnings were bad. Worse still, the crypto exchange is now warning that bankruptcy could wipe out user funds
BY NICHOLAS GORDON
Fortune
May 11, 2022 1:59 AM CDT
Hidden away in Coinbase Global’s disappointing first-quarter earnings report—in which the U.S.'s largest cryptocurrency exchange reported a quarterly loss of $430 million and a 19% drop in monthly users—is an update on the risks of using Coinbase’s service that may come as a surprise to its millions of users.
In the event the crypto exchange goes bankrupt, Coinbase says, its users might lose all the cryptocurrency stored in their accounts too.
Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.” Coinbase users would become “general unsecured creditors,” meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.
That shouldn’t happen.
An individual’s ownership of cryptocurrency is supposed to be immutable and absolute; that's one of the key selling points touted by blockchain evangelists everywhere. But when a user creates a Coinbase account, they often end up storing their cryptocurrency in a wallet controlled by Coinbase, which means the individual is giving away at least part of their control over their own funds.
Access to a crypto wallet is governed by a private key, which is a long string of characters that effectively acts as a password. Without the key, the cryptocurrency in the wallet can’t be accessed. On Coinbase, the exchange holds the private key and lets users access the funds within the wallet using a more conventional password. The setup makes it easier for users to enter their accounts, by remembering an easier password.
Yet it means that when push comes to shove, Coinbase ultimately governs whether a user gets access to those assets.
In comments shared on Twitter, Coinbase CEO and founder Brian Armstrong said the exchange had “no risk of bankruptcy,” and that the disclosure was made due to new rules set by the U.S. Securities and Exchange Commission regarding public companies that hold crypto assets on behalf of others.
“This disclosure makes sense in that these legal protections have not been tested in court for crypto assets specifically, and it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings even if it harmed consumers,” Armstrong tweeted, while reassuring users that “your funds are safe at Coinbase.”
Coinbase does offer a self-custody wallet, titled “ Coinbase Wallet,” in which users know their private key, and a Coinbase Wallet—or any crypto wallet—is not required to trade crypto on Coinbase. But by admitting that crypto assets aren't secure in the event of a bankruptcy, Coinbase is also highlighting a major difference between storing your funds with blockchain exchanges, versus keeping cash with traditional banks.
Bank accounts in the U.S. are protected by deposit insurance offered by the Federal Deposit Insurance Corporation. In the event a bank fails, the FDIC steps in to protect deposits up to $250,000, preventing depositors from going broke along with the bank. Crypto exchanges don't offer that same protection—which is the primary reason why crypto enthusiasts advise investors to hold their cryptocurrency in a personal wallet, rather than on an exchange.
Coinbase shares fell 15.6% in after-hours trading after the exchange released its earnings, dragging the crypto exchange's stock price down to 80% below its Nasdaq debut in April 2021. Besides reporting a declining user base and lower than expected revenue, trading volume on the Coinbase exchange declined from $547 billion to $309 billion in the first quarter, over the same period last year. Coinbase warned that trading volume was likely to decline further in the current quarter
Coinbase admits users may lose crypto if exchange goes bankrupt | Fortune |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| To: Glenn Petersen who wrote (66) | 5/11/2022 11:45:42 AM | | From: Glenn Petersen | | | | Crypto Winter May Be Harsh for Coinbase
The company plans to invest even if crypto activity continues to fall, but investors may not have the same patience
By Telis Demos
Heard on the Street
Wall Street Journal
May 11, 2022 11:34 am ET
The weather is getting warmer outside, but Coinbase Global COIN -24.49% is settling in for a tough winter.
Even before the drop in the price of bitcoin and other cryptocurrencies this month, Coinbase COIN -22.75% was recording a big decline in activity on its platform in the first quarter, the company reported on Tuesday.
The number of monthly transacting users fell more than 2 million from the fourth quarter to the first, to 9.2 million. Trading volume slid by 44% over that period and total transaction revenue was 56% lower. The company said crypto volatility continued to decline into April, hitting the lowest level since mid-2020, and it expects lower monthly transacting users and trading volumes in the second quarter.
The company has long been anticipating another possible deep-freeze period for crypto activity. Chief Executive Brian Armstrong said on the company’s earnings call on Tuesday that Coinbase has been through crypto’s past cycles, and that he now sees an opportunity to focus on building for the future rather than scrambling to keep up with frenzied activity. “Ironically, I’ve never been more bullish on where we are as a company,” he said.
Investors in the company could use a dose of whatever is making him so optimistic, though, as Coinbase shares have lost around three-quarters of their value so far this year. Given that it is so difficult to predict the crypto cycle, when it might turn and how big the next wave will be, investors need to look to other measures of the company’s underlying economics. One silver lining is that the retail fee rate—or how much retail transaction revenue is generated as a percentage of retail trading volume—actually rose over the first quarter from the fourth. There has long been concern that this rate, now at 1.31%, would sharply drop over time. The fact that it hasn’t may be an indicator that Coinbase’s relatively established brand is worth something to customers, and that its pricing strategies are working.
Still, that resilience was counterbalanced in the quarter by a decline in the rates institutions paid. Institutional transacting makes up the bulk of Coinbase’s volume, though it generates a fraction of the revenue that retail does. The institutional fee rate fell over the course of the first quarter, which the company attributed to a change in the fee structure for market makers. Institutional trading also represented an even bigger share of volume than in recent quarters.
There is the long-term potential of expanding the business in nontrading crypto activities. For brokerages in traditional assets, one way to offset a decline in active trading is by offering passive, higher-yield investment products, or paying interest on cash to keep attracting assets while earning more on lending. Robinhood Markets this week said it would raise the interest rate available on uninvested cash to 1%.
The number of Coinbase users engaged with yield-generation products rose from 3.6 million to 5.8 million during the most recent quarter, which the company said was largely driven by the launch of “staking” in the Cardano blockchain network. Staking is a way to earn a form of yield by getting rewards for participating in a network. On average in the first quarter, more than half of monthly transacting users were using products beyond trading, such as staking, the company said. Nontransaction subscription and services revenue fell 29% from the fourth quarter to the first, though it was still close to triple what it was a year ago.
Still, the future potential of crypto yield has its own uncertainties. For one, there are the regulators: Coinbase didn’t launch an anticipated yield-paying lending product last year after the Securities and Exchange Commission threatened enforcement action. It isn’t yet clear how or in what form such offerings may return. People also can seek yield in the wider “decentralized finance” ecosystem, but some may be more reluctant to do so after the volatility surrounding TerraUSD. Among the drivers of the algorithmic stablecoin’s recent growth was its use in a lending protocol that allowed investors to earn returns of nearly 20% annually.
Coinbase may be smart to plant seeds for growth before winter arrives. But investors shouldn’t start dreaming of spring flowers yet.
Crypto Winter May Be Harsh for Coinbase - WSJ |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: Glenn Petersen | 5/17/2022 6:46:32 AM | | | | | | Coinbase slows hiring to help weather market downturn
by Ryan Weeks
The Block
May 17, 2022, 3:04AM EDT · 2 min read
Cryptocurrency exchange Coinbase has reined in a plan to triple its headcount this year in response to turbulent market conditions.
Emilie Choi, Coinbase’s president and chief operating officer, said in a blog post on Tuesday that the firm would be slowing hiring to “reprioritize our hiring needs against our highest-priority business goals.” The note had been circulated among staff earlier.
“Heading into this year, we planned to triple the size of the company. Given current market conditions, we feel it’s prudent to slow hiring and reassess our headcount needs against our highest-priority business goals,” she said. “Headcount growth is a key input to our financial model, and this is an important action to ensure we manage our business to the scenarios we planned for, specifically the potential adjusted Ebitda we are aiming to manage to.”
The news comes with crypto markets in turmoil following last week's spectacular collapse of TerraUSD (UST), the crypto industry’s third-largest stablecoin. Major cryptocurrencies across the board are down, with bitcoin dropping below $30,000 last week for the first time this year.
Shares in Coinbase — which went public via a direct listing last year — have also taken a beating, dropping to new lows last week after its earnings report for the first quarter underwhelmed. The stock closed at $61.70 on Monday, an 80% slide from its first day as a public company in April 2021.
In her note, Choi said that “now is the time to ensure we are fully integrating all recent hires — so we can ensure that they are successful at Coinbase.”
“Big picture: We know this is a confusing time and that market downturns can feel scary. But as we said at last week’s Town Hall, we plan for all market scenarios, and now we are starting to put some of those plans into practice,” she continued. “We’re in a strong position — we have a solid balance sheet and we’ve been through several market downturns before, and we’ve emerged stronger every time.”
Coinbase slows hiring to help weather market downturn (theblockcrypto.com) |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| To: Glenn Petersen who wrote (68) | 6/5/2022 7:38:24 AM | | From: Glenn Petersen | | | | Coinbase Freezes Hiring and Will Rescind Accepted Job Offers
The crypto crash and fears of a Crypto Winter have prompted Coinbase to get even more aggressive in cutting costs.
By Andrew Hayward
Decrypt
Jun 2, 2022
3 min read
In brief
-- Posting a $430M loss in Q1 2022, Coinbase will "take more stringent measures" in hiring.
On the same day that rival crypto exchange Gemini confirmed layoffs, Coinbase announced today that it will continue its hiring freeze amid a tumultuous recent market for both cryptocurrency and tech stocks. Furthermore, the firm will rescind some job offers for employees who had accepted positions but had not yet started working.
Coinbase first announced plans in May to slow hiring, but today’s blog post from L.J. Brock, Coinbase’s chief people officer, confirms that the company will take a more severe turn.
“As these discussions have evolved, it’s become evident that we need to take more stringent measures to slow our headcount growth,” Brock wrote. “Adapting quickly and acting now will help us to successfully navigate this macro environment and emerge even stronger, enabling further healthy growth and innovation.”
According to Brock, the freeze will include not only new, unfilled positions, but also backfilling existing empty roles in the company. There’s an exception for “roles that are necessary to meet the high standards we set for security and compliance, or to support other mission-critical work.”
Furthermore, Coinbase will pull some accepted offers for incoming employees who have yet to start.
Brock wrote that it is “not a decision we make lightly,” but that Coinbase sees it as “necessary to ensure we are only growing in the highest-priority areas.” The firm said that there will be limited exceptions and that all affected people will be notified today.
Brock added that the move is “not a reflection on the highly talented people we had extended job offers to,” and that the firm will offer severance to those with rescinded offers as well as help them find jobs elsewhere in the industry.
The announcement comes less than a month after Brock had promoted the fact that Coinbase was hirig.n
In May, Coinbase posted a $430 million loss for Q1 2022 after missing analysts’ predictions on both profit and revenue for the quarter. Coinbase’s stock price is down more than 40% over the last month alone at a current price of under $74 per share.
“We always knew crypto would be volatile, but that volatility alongside larger economic factors may test the company, and us personally, in new ways,” Brock wrote today. “If we’re flexible and resilient, and remain focused on the long term, Coinbase will come out stronger on the other side.”
As mentioned, Gemini announced this morning that it will lay off 10% of its staff to prepare for a “crypto winter” ahead. In late April, crypto and stock trading app Robinhood laid off 9% of its staff as growth slowed. Crypto markets have seen extreme volatility in recent weeks, with the price of top crypto Bitcoin down 21% over the past 30 days.
Coinbase Freezes Hiring and Will Rescind Accepted Job Offers - Decrypt
Crypto Winter Layoffs Hit Hard—But Won’t Kill the Industry
Big crypto companies like Coinbase, Gemini, Bitso and more are battening down the hatches. Will they emerge from it leaner and stronger?
By Daniel Roberts
Decrypt
Jun 4, 2022
3 min read
If you don't think we're in Crypto Winter yet, consider these headlines from the week: Gemini laid off 10% of its staff; Coinbase instituted a hiring freeze and rescinded accepted job offers; Mexico's largest crypto exchange Bitso laid off 10% of its staff; and Argentina-based crypto exchange Buenbit laid off 45% of its staff.
The news is bad. And if you're an engineer who got a letter from Coinbase canceling a job offer you already accepted, there's no silver lining here. It's enough to make someone sour on working in the crypto industry at all.
But if you zoom out, there's reason not to panic.
Those calling this period the end of crypto (and there are so many saying it) clearly weren't in this industry in 2018. During that time, in which Bitcoin tanked 70% after peaking at $20,000, I kept hearing the same refrain from crypto execs and entrepreneurs I'd welcome on Yahoo Finance live shows: "We're putting our heads down and building now." It was difficult not to scoff at that talking point back then, because what else could they say? But many of the tools and platforms built during that time became the key success stories of the pandemic-prompted crypto boom in 2020 and 2021. They really did build things.
This is why it's reasonable for Dan Held, a Bitcoin O.G. who sold his price app ZeroBlock to Blockchain.com in 2013 long before he was a Twitter influencer with 600,000 followers, to declare that this Crypto Winter will be milder than past winters.
Held joined me for a chat at CoinMarketCap's virtual conference last week and said people are now going back "from HODL to BUIDL... The original Bitcoin ethos was all about building. Back in the early era, everyone had their own side project because they needed to go build something to make the ecosystem better. ... Now we've got A-players across all of tech wanting to come build things in the crypto ecosystem, we've got VC funds raising tens of billions of dollars in aggregate to go deploy into this ecosystem, so I don't think this winter is going to be as harsh as the other ones."
Another crucial point about this Crypto Winter is that non-crypto tech stocks aren't faring any better right now. Pandemic darlings Peloton (PTON) and Zoom (ZM) are down 60% and 40% this year, respectively. How about those once-hallowed FAANG names? Facebook ( changing its stock ticker to META next week) is down 45% this year, Amazon (AMZN) is down 28%, Apple is down 20%, Netflix (NFLX) is down 68% (goodness gracious), and Alphabet (GOOG) is down 22%.
No matter what, rescinding job offers is a terrible look, and Coinbase's reputation will now take yet another P.R. hit. But companies often have to cut head count during downturns—it's what they do to survive. When other large companies make job cuts (like in March 2020) the media reaction is not to declare their industry dead. But crypto, in the big scheme of things, is still so new (even after 13 years for Bitcoin) that skeptics still insist the entire thing could collapse.
It will not.
Crypto Winter Layoffs Hit Hard—But Won’t Kill the Industry - Decrypt |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: Glenn Petersen | 6/14/2022 10:03:23 PM | | | | | | Coinbase lays off 18% of workforce as executives prepare for recession and ‘crypto winter’
PUBLISHED TUE, JUN 14 20228:15 AM EDT
UPDATED 28 MIN AGO
Kate Rooney @KR00NEY
CNBC.com
KEY POINTS
--mCoinbase will cut 18% of full-time jobs, according to an email sent to employees Tuesday.
-- CEO Brian Armstrong pointed to a possible recession, a need to manage costs and growing “too quickly” during a bull market.
-- “We appear to be entering a recession after a 10+ year economic boom,” Armstrong says. “While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”
Coinbase is laying off almost a fifth of its workforce amid a collapse in its stock and crypto prices.
The cryptocurrency exchange will cut 18% of full-time jobs, according to an email sent to employees Tuesday morning. Coinbase has roughly 5,000 full-time workers, translating to a head count reduction of around 1,100 people.
Shares of Coinbase closed down .83%.
CEO Brian Armstrong pointed to a possible recession, and a need to manage Coinbase’s burn rate and increase efficiency. He also said the company grew “too quickly” during a bull market.
“We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period,” Armstrong said in the email, adding that past crypto winters have resulted in a significant decline in trading activity. “While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”
Coinbase had initially said it was pausing hiring. Two weeks later, the crypto giant announced that it was extending the freeze for the “foreseeable future.” Earlier this year, Coinbase said it planned to add 2,000 jobs across product, engineering and design.
“Our employee costs are too high to effectively manage this uncertain market,” Armstrong said. “While we tried our best to get this just right, in this case it is now clear to me that we over-hired.”
The news comes during a deep rout for Coinbase shares. The stock went public via a direct listing last April during a boom in crypto markets and investors clamoring for high-growth tech stocks. Coinbase’s shares are down 79% this year and 85% from the all-time high. Meanwhile, bitcoin has dropped to near $22,000 and has lost 53% of its value this year.
San Francisco-based Coinbase reported a slump in users in its last quarter and a 27% decline in revenue from a year ago. The company gets the majority of its top line from transaction fees, which are closely tied to trading activity.
President and Chief Operating Officer Emilie Choi called it a “very difficult decision for Coinbase” but given the economic backdrop, she said it “felt like the most prudent thing to do right now.”
Affected employees received a notification from human resources. If so, the memo was sent to a personal email as Coinbase cut off access to the company systems. Armstrong called it the “only practical choice” given the number of employees with access to customer information, and a way to “ensure not even a single person made a rash decision that harmed the business or themselves.”
Coinbase employees will have access to a talent hub to find new jobs in the industry, including Coinbase Ventures’ portfolio companies. Choi said Coinbase would still be “doubling down” on areas like security and compliance and may be “reorienting” employees to near-term revenue drivers.
“If there are any cuts to new product areas, it’s going to be more around experimental venture areas that we’re still very bullish on, but that we don’t want to invest in in this part of the cycle,” Choi told CNBC in an interview at the company’s headquarters.
“We will continue to invest in incredible innovative areas of crypto that we think are emerging over the longer term, but we’re probably going to do those in a more measured way in this type of an environment.”
Coinbase joins dozens of other tech and crypto companies slamming the brakes on hiring. Crypto lender BlockFi said Monday it was cutting 20% of its employees. Open-source tracker Layoffs.fyi estimates that more than 5,500 start-up and tech jobs have been cut in June alone.
Coinbase’s intention is “that this is a one-time event,” Choi said adding that the company has $6 billion of cash on the balance sheet. The company has lived through multiple bear markets in crypto before, also known as “crypto winters.”
“We will power through any macro environment, any crypto winter, or anything that’s coming,” she said. “The reality though, is that we have to adjust when we feel that there’s a very dynamic economic environment in play.”
Tech companies have been fighting low morale and attrition as their stocks get slammed. Last week, a petition posted to a decentralized publishing platform called for the removal and a “vote of no confidence” regarding several Coinbase executives, including Choi.
Armstrong called attention to the since-deleted petition, and in a Tweet urged employees to quit if they don’t believe in the company.
“We will always encourage our employees to share feedback internally on how we operate as a company — and we have a number of mechanisms in place for them to do so. It’s very much unclear if this document came from within the company,” Choi said. “However, if it did, we’re disappointed that those behind it felt the need to breach the trust of the company and their co-workers by sharing this information in a way clearly designed to drive controversy rather than a meaningful dialogue.”
Coinbase has no plans to offer additional company equity grants, or cash compensation amid the price drop, Choi said. The company offers annual grants, partially so employees could “mitigate the swings” and volatility in crypto. For employees and investors, the COO likened it to Amazon or Tesla: a long-term investment with volatility in the meantime.
“We think that anyone who makes an investment, whether they’re an employee or investor, will have a handsome return over the longer term,” Choi said. “Coinbase is a long-term play — we have very deep conviction in the long-term value of the stock.”
Coinbase lays off 18% as execs prepare for recession, 'crypto winter' (cnbc.com) |
| | Coinbase Global, Inc. (COIN) | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| |
