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Coinbase Posts Loss as Crypto Market Turmoil Hits Trading Volumes

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Coinbase Posts Loss as Crypto Market Turmoil Hits Trading Volumes

:Coinbase Global Inc reported a bigger-than-expected quarterly loss on Tuesday as investors worried about the rout of risky assets this year avoided trading cryptocurrencies, sending its shares down 6%.

Trading volumes on the cryptocurrency exchange more than halved to $217 billion in the second quarter, as retail participation fell 68% and institutional trading fell 46%.

Investors have thrown speculative assets from equities into crypto this year, fearing that aggressive central bank policy tightening could tip the US economy into a recession.

This caused the crypto bitcoin to plummet 50% in 2022 and forced several companies, including Coinbase – which derives most of its revenue from trading fees – to cut jobs.

The cryptocurrency exchange expects trading volumes in the third quarter to be even lower than in the reporting period.

“Coinbase will likely need to continue to cut costs if it is to avoid missing its target and maintain credibility on its ability to limit cash burn,” said Michael Miller, equity analyst at Morningstar Research.

The company said it aimed to contain the adjusted base loss to nearly $500 million for the year.

In the April-June quarter, it posted an adjusted loss of $4.76 per share, versus $2.65 expected by analysts, according to Refinitiv IBES data.

Revenue fell 63% to $808 million, missing market expectations.

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