Coinbase’s chief executive Brian Armstrong said that he expects the crypto winter to last about 12 to 18 months, but is also preparing for the possibility for it to drag on longer. As bitcoin lost almost 55% year-to-date, Coinbase
posted a net loss of $1.09 billion in the second quarter, whereas it reported net income of $1.61 billion in the year-before quarter. The crypto exchange platform’s shares are off more than 70% year-to-date, according to Dow Jones market data.
Still, Armstrong said the market downturn is “not unusual” for the company, according to a CNBC interview Tuesday. “We’ve been through four cycles like this as a company. We’re only 10 years old. This one just happens to coincide with the broader macro environment coming down,” Armstrong said. The crypto exchange has been looking for ways to cut costs, Armstrong said. It is looking to reduce costs related to marketing, external vendors, and Amazon Web Services, according to the CNBC interview. In June, Coinbase laid off 18% of its employees, citing cited the rapidly changing economic conditions, the needs for managing costs, and the company’s previous over-hiring. Armstrong also said that the company aims to “get to a place where more than 50% of our revenue is subscription and services,” as growing competition among crypto exchanges might force down trading fees. “I do think there’s going to be margin compression, eventually it has to happen at some point because everything that we’re building, you know, others, eventually build it and it’ll become a little bit more commoditized,” Armstrong said. Coinbase’s subscription and services …