© Reuters. FILE PHOTO: A smartphone with displayed Coinbase logo and representation of cryptocurrencies are placed on a keyboard in this illustration taken, June 8, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
By Hannah Lang
(Reuters) -Cryptocurrency exchange Coinbase (NASDAQ:) on Thursday beat estimates for third-quarter revenue, but saw trading volumes decline for the second quarter in a row, sending shares of the company down in after-hours trading.
Trading volumes at the crypto exchange in the third quarter came in at $11 billion, compared with $26 billion a year earlier, mirroring a similar fall in the prior quarter ended June 30.
Total revenue in the three months ended Sept. 30 was $674.1 million, compared with analysts’ estimate of $653.19 million, according to LSEG data.
Shares of the crypto exchange fell more than 4% in extended trading after results as investors weighed the waning trading volumes.
“Although we continue to be in a down market with volatility the lowest we’ve seen in years, Coinbase is financially healthy,” said Coinbase CEO Brian Armstrong on a post-earnings call with analysts.
Investor sentiment toward cryptocurrencies has been lukewarm this year after a string of high-profile collapses in 2022 led to outflows of more than a trillion dollars from the sector.
The decline in trading volumes comes as Coinbase continues to battle the U.S. Securities and Exchange Commission (SEC), which sued it and rival Binance in June, alleging it traded at least 13 crypto assets that are securities without registering them with the regulator. Both have denied the allegations.
In its previous earnings call, Coinbase Chief Legal Officer Paul Grewal said he expects Coinbase to prevail in the case.
In its shareholder letter, Coinbase said it generated approximately $105 million of total transaction revenue in October as the price of bitcoin – the world’s largest cryptocurrency – enjoyed a bounce, but the company urged caution in extrapolating those results.
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