Bitcoin ( BTC-USD ), the world's biggest cryptocurrency by market cap, dropped 14% in Q4 2022, as crypto markets suffered the repercussions of high-profile collapse of Sam Bankman-Fried's FTX crypto exchange in November. Coinbase Global ( NASDAQ: COIN ), during the same period, plunged 46%. Investors' fear of roiling crypto markets is sure to show up in the crypto exchange's Q4 results, set to be released on Tuesday after the closing bell. The cryptocurrency exchange is expected to post Q4 loss per share of $1.41, narrower than its $2.38 loss per share in Q3 but far worse than Q4 2021, when it had EPS of $3.32. The average analyst estimate for Q4 2022 revenue of $586.3M compares with $590.3M in Q3 and $2.49B in the year-ago quarter. In the six quarters that Coinbase ( COIN ) has been a publicly traded company, its earnings have missed the Wall Street consensus twice and its revenue has fallen short four times. While trading volumes for the quarter are largely known, D.A. Davidson Christopher Brendler is concerned about Coinbase's ( COIN ) assets under management, especially on the institutional side, after the FTX bankruptcy. He has also tempered his expectations on interest, which "still should be a big positive," as stablecoin balances are dropping and AUM declined. "Combined, we think 4Q and 2023 guidance are likely to disappoint, and we see little risk of the stock getting away from us at least around earnings," the analyst wrote last week in a note that downgraded Coinbase ( COIN ) to Neutral. CoinGecko data indicates Coinbase's ( COIN ) volume in December was $34B, less than half the company's monthly average of ~$76B in the Q1-Q3 2022, Bank of America analyst Jason Kupferberg said in a Jan. 11 note that downgraded the stock to Neutral. That bodes ill for the company's 2023 outlook. "With heightened regulatory uncertainty and consumer confidence shaken due to FTX, we think retail crypto market participation will remain tepid in 2023 and note that COIN’s retail take-rates are ~90x that of institutional," Kupferberg said. Early in January, Coinbase ( COIN ) announced ~950 job cuts , or ~25% of its headcount in a move that's expected to reduce Q1 operating expenses by 25% from Q4. See why SA contributor The Digital Trend expects the SEC's scrutiny of Binance, Paxos, and Kraken to benefit Coinbase ( COIN ).
