The largest U.S.-based cryptocurrency exchange, Coinbase, earned just US$406 million net income in Q3 this year — a 74.7% decline over the previous quarter — according to the company’s investor earnings report released yesterday.

Fast facts

  • That figure represents a 500% increase over Q3 last year, but is significantly less than the US$1.6 billion in net income the company earned in the April through June quarter, the first quarter as a publicly traded company which took place during the height of the market bull run. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITA) for the quarter was US$618 million, and the company finished the quarter with approximately US$6.4 billion in cash.
  • Following the release of the report, Coinbase’s share price fell roughly 10% in after-hours trading yesterday to US310, according to MarketWatch.
  • Coinbase is not alone in posting reduced earnings for the quarter, however; trading app Robinhood’s crypto revenue fell even further with a 78% decrease over the previous quarter, earning only US$51 million during that time. In payment giant Square’s Q3 report released last week, the company reported a 23% decrease in Bitcoin profits from the previous quarter.
  • As the firm expands its listings, Bitcoin and Ethereum no longer represented the majority of trading volume or transaction revenue in the quarter. While each controlled 26% of the total in Q2, Bitcoin and Ethereum were down to 21% and 22% this quarter respectively. All other assets represented 57% of transaction revenue and 59% of trading volume.
  • Looking to take advantage of the excitement surrounding the world’s leading memecoins, Coinbase saw a boost in trading when it listed Dogecoin in June and similarly in September with the listing of copycat Shiba Inu token. SHIB was on a price tear recently, gaining 200% within a week to reach a high of US$0.00008845, overtaking DOGE in the process to briefly reach seventh position by market cap on the crypto top 10. It has since retreated from this position and was sitting in 11th position at time of publication, according to CoinMarketCap.
  • Much of the decline in revenue on crypto trading platforms could be attributed to weaker market conditions than in the previous quarter. Despite Coinbase’s underwhelming report, CEO of competitor exchange FTX, Sam Bankman-Fried concluded his analysis of the report on Twitter with a hopeful message for both Coinbase and the industry as a whole in Q4. “Coinbase is doing pretty well. They made $600m EBITDA last quarter, and next quarter is likely to be higher,” he wrote.