© Thomson Reuters PHOTO. The image shows an image of a cryptocurrency and the Coinbase logo.Written by Manya Saini
(Reuters) - Coinbase Global Inc posted a fourth-quarter loss on Tuesday as the cryptocurrency exchange's trading volume was pressured by an industry-wide slowdown hit by a string of multiple bankruptcies.
The digital asset market has taken a major hit over the past year, but the biggest blow to the sector was the collapse of Sam Fred Bankman's largest crypto exchange, FTX, in November.
“Following the failure of FTX and other crypto companies, we've seen closer scrutiny from regulators,” CEO Brian Armstrong said in an analyst call, but added that the development will ultimately benefit Coinbase.
Trading volume on the cryptocurrency exchange fell to $145 billion in the fourth quarter, compared to $547 billion a year earlier, amid a market slump.
Retailers also saw a notable decline, with their sales falling nearly 89% in the quarter to hit $20 billion.
The highlight was subscriptions and services revenue, which rose about 33% to $282.8 million in the fourth quarter, driven by a sharp rise in interest rates.
Coinbase shares rose in choppy trading after the bell.
The cryptocurrency exchange expects subscriptions and services revenue to be between $300 million and $325 million in the first quarter, beating Wall Street's estimate of $285.7 million, according to data from Refinitiv.
"I think it's a very good report with an encouraging outlook. Let's see how the stock fares," Oppenheimer analyst Owen Lau told Reuters, adding that the forecast is supported by cost controls and improved earnings momentum.
The company's net income for the first quarter was $605 million, compared to $2.49 billion a year earlier.
For the three months ended December 31, Coinbase posted a net loss of $557 million, compared to a profit of $840 million a year earlier.
(Reporting by Manya Sen in Bangalore; Editing by Krishna Chandra Elori)