Shares CoinbaseThe company reported that Wednesday morning’s plunge was around 16% reportedSluggishing revenues and decreasing users

Coinbase announced Tuesday that it saw revenue drop 27% to $1.17billion year-over-year, below Wall Street’s estimate of $1.48billion. The company also reported a loss of $430 million for the first quarter.

The fourth quarter saw a decline in Coinbase usage. From 11.4million in the fourth quarter, 9.2 million retail monthly transaction users were down to 9.2 millions. The total trading volume fell from $547 billion to $309 billion during the fourth quarter, down from 11.4 million in the previous quarter.

This earnings report is coming amid an overall sell-off within the technology sector and the cryptocurrency market is going through a significant downturn. Bitcoin, which is the largest cryptocurrency by market value in the world, has dropped more than half its price from November 2021’s peak of $68,990.90. As of Wednesday morning it was at 6% trading below $30,000.

Many firms have reduced the price targets for Coinbase stock after this report.

JPMorgan analysts stated that revenues were below expected, but expenses rose faster than expected. This led to earnings being meaningfully lower. From $258, the firm has lowered its price target by $171.

The stock was downgraded by Goldman analysts to neutral. They wrote to their clients Wednesday, stating that Coinbase’s profitability is not likely to be restored in the immediate future.

“In an environment in which the market is focused only on profitability, recession risks, and the disappearing
We believe that COIN stock will not outperform the market in the short term due to the pandemic-driven enthusiasm in retail trading,” analysts stated.

This report was contributed by Michael Bloom and MacKenzie Sigalos of CNBC.

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