Coinbase Losses

Crypto Market Week in Review (24 February 2023)


This week both stocks and bond prices moderately declined, reacting to renewed fears about a tighter monetary policy. Activity indexes (PMIs) for major countries published this week were stronger than expected, suggesting a resilient global economy but more hawkish central banks.

Coinbase, which is the only large crypto exchange disclosing full financial statements, published a quarterly report this week. The revenue tumbled 75% compared to the year-earlier period amid plunging trading volumes, and the net loss was $575 million. However, operational-level (adjusted EBITDA) loss was relatively modest at $124 million thanks to expense reduction, and the company targets adjusted EBITDA break-even regardless of market conditions. All in all, the exchange adapted to harsh crypto market conditions, and the stock market views the report as only modestly negative. Coinbase shares have rallied 76% this year, but are largely stuck near the level from last May.

Coinbase stock price (USD)

Source: TradingView

Cryptocurrencies slightly declined in line with other risk assets. On Monday Bitcoin reached a maximum since June 2022 (on the daily close basis) but then reversed, losing about 2% since the last Friday’s close. Ethereum declined largely in line with Bitcoin. Even OKX’s token (OKB) stalled after an epic rally, dropping by 12% since the last Friday. It is still up by about 2 times this year.

Stake Ethereum

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Source: TradingView

The implied volatility of both Bitcoin and Ethereum declined during the week. Bitcoin volatility curve turned flat. The implied volatility of Ethereum reached the lowest level since January 10.

Despite still-muted interest in Ethereum options, Ethereum perpetual futures open interest on Deribit rose to the highest since June 2022. It seems that derivative traders prefer to bet on the coming Shanghai upgrade via futures rather than options.

Ethereum perpetual futures open interest

Source: Deribit

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