Coinbase reported a 27% drop in revenue in the first quarter as platform usage declined.
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Queen Piece Wednesday He said he had no exposure to the opposite party To collapsed crypto firms Celsius, Three Arrows Capital and Voyager Digital, in an effort to allay concerns about the impact of the liquidity crunch on their businesses.
The US cryptocurrency exchange also said that it is “not underfunded” for its respective companies collapsed into bankruptcy After the price of the digital tokens fell, it launched a series of liquidations in highly leveraged positions.
Coinbase says it made an ‘non-material’ investment in Terraform Labs, the Singapore-based company Terra . Stable Coin Project Failedthrough its venture capital arm.
“Many of these companies were debt-laden with short-term liabilities mismatched with longer-duration illiquid assets,” the company said.
“We did not engage in these types of risky lending practices and instead focused on building our financing business with prudence and a deliberate focus on the customer,” she added.
Coinbase shares rose more than 14% on Wednesday. The stock has wiped out about 70% of its value since the start of 2022, as the Federal Reserve’s rate hike rattled investors in both cryptocurrencies and stocks.
The cryptocurrency market has been in absolute chaos Since the demise of Terrathe so-called “algorithm” stablecoin that tried to maintain the value of $1 using the code.
This led to liquidity issues at Celsius and Three Arrows Capital, or 3AC, two companies that make risky crypto gambling using borrowed money.
As the cryptocurrency started to decline this year, investors wanted to withdraw their funds from companies like Celsius and 3AC. But the decline in the value of the assets held by these companies means that they are unable to process these redemption requests.
As a result, Celsius, Voyager, and others halted withdrawals before eventually filing for bankruptcy protection.
Bitcoin It rose above the $24,000 mark on Wednesday, for the first time in more than a month, along with a Crypto broad recovery the prices. The world’s top digital currency is still down almost 50% so far.
Investors hope the Fed will be too Less aggressive than feared With an expected rise in interest rates next week.
Central banks are racing to tame hyperinflation with tighter monetary policy, but this has raised concerns about stocks and other risky assets — including cryptocurrencies — that have benefited from an outpouring of stimulus during the COVID-19 pandemic.