Coinbase Global Inc reported a fourth-quarter loss on Tuesday, as trading volume at the cryptocurrency exchange came under pressure from an industry-wide downturn triggered by a string of high-profile bankruptcies.
The digital assets market suffered from dour sentiment over the last year, but the biggest blow to the sector came from the bankruptcy of Sam Bankman-Fried’s major crypto exchange FTX in November.
“In the wake of FTX and other crypto company failures, we have seen increased regulatory scrutiny,” Chief Executive Brian Armstrong said on a call with analysts but added the development will ultimately benefit Coinbase.
Amid the market downturn, trading volume at the crypto exchange plunged to $145 billion in the fourth quarter, compared with $547 billion a year earlier.
Retail traders also pulled back significantly, with their trading volume in the quarter plummeting nearly 89% to $20 billion.
One bright spot was subscription and services revenue, which rose about 33% to $282.8 million in the fourth quarter, benefiting from hefty interest rate hikes.
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