Head of Coinbase reported the halving of the exchange's revenues
Brian Armstrong said the drop in revenue was due to the aftermath of the FTX collapse. But despite the decline in confidence in the industry caused by the collapse of that exchange, he will continue to advocate for the industry
The head of Coinbase, the largest U.S. cryptocurrency exchange, Brian Armstrong said the company's revenue will halve or more this year because the decline in cryptocurrency prices and the collapse of FTX undermined investor confidence. In an interview with Bloomberg, he said that Coinbase's revenue was about $7 billion in 2021, and he estimated it would drop to about $3.2 billion this year.
The collapse of FTX in early November exacerbated an already dire situation in the cryptocurrency market. Cryptoprojects faced a liquidity crisis, cryptocurrency prices plummeted, the number of speculators decreased, and investors began to leave for less risky assets.
Shares of Coinbase (COIN) fell 85% over the year from $286.45 to $41.35. In the third quarter of this year, the company's revenue was about a quarter of the revenue in the last three months of 2021, when the bitcoin price hit its all-time high of $69,000.
Armstrong noted that the FTX collapse, in his opinion, was the result of "massive fraud" rather than mismanagement or accounting errors, as Sam Bankman-Fried claims. According to the head of Coinbase, FTX executives have illegally used customer funds and are therefore now in a very difficult position.
Despite the decline in confidence in the industry caused by the Bankman-Fried exchange collapse, Armstrong said he plans to continue supporting the industry's interests in the U.S. Congress, and suggested that legislation related to cryptocurrencies could be passed within the next year. He said the focus should be on rules regarding stablcoins and centralized exchanges, as well as clarity in determining whether cryptocurrencies qualify as commodities or securities.
Armstrong said it is likely that 20 percent of Congress is either very hostile to cryptocurrencies or simply unaware of them, but that is not the majority opinion at this point. He added that he hopes to be successful in pushing the issue in the U.S. and then plans to move on to other G20 countries.