This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
What happened
Shares of Coinbase Global (NASDAQ: COIN) sank 8% on Wednesday after the digital-asset trading platform's third-quarter results fell short of investors' expectations.
So what
Coinbase's net revenue decreased by 41% sequentially to $1.3 billion. That was below Wall Street's estimates, which had called for revenue of roughly $1.6 billion.
The cryptocurrency exchange's monthly transacting users fell to 7.4 million, compared to 8.8 million in the second quarter. Its trading volume, in turn, declined by 29% to $327 billion.
All told, Coinbase's net income plunged 75% to $406 million.
Now what
Coinbase's fortunes are largely dependent on the continued success of Bitcoin and Ethereum, the two most popular and valuable cryptocurrencies. Bitcoin accounted for 19% of Coinbase's trading volumes in the third quarter, while Ethereum represented 22%. Thus, the recent rally in Bitcoin's and Ethereum's prices to new all-time highs bodes well for Coinbase's fourth-quarter results.
Looking further ahead, Coinbase's fate is likely to correlate with cryptocurrency adoption trends.
"Coinbase is not a quarter-to-quarter investment, but rather a long-term investment in the growth of the cryptoeconomy and our ability to serve users through our products and services," the company said in a letter to shareholders. "We encourage our investors to take this point of view."
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.