Bitcoin BTC , ethereum and other major cryptocurrencies have collapsed this year, plunging the burgeoning crypto industry into a crisis that could be about to get a whole lot worse.
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The bitcoin price has dropped to around $17,000 per bitcoin, down around 75% from a peak of almost $70,000 in 2021, with the ethereum price seeing a similar decline and one of the biggest crypto bulls issuing a surprise price prediction.
Now, the chief executive of bitcoin, ethereum and crypto exchange Coinbase, Brian Armstrong, has warned that “with everything coming down,” the company expects its revenue to crash by more than 50% in 2022 (even after the world’s largest asset manager predicted the “next generation of markets”).
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Coinbase CEO Brian Armstrong has warned the company is going to post a 50% revenue decline due to … [+]
“Last year in 2021, we did about $7 billion of revenue and about $4 billion of positive [earnings before interest, taxes, depreciation and amortization] and this year with everything coming down, it’s looking, you know, about roughly half that or less,” Armstrong said during a Bloomberg interview.
Coinbase’s stock has plunged along with the price of bitcoin, ethereum and other cryptocurrencies this year, wiping away almost 90% of its value after the San Francisco-based company made its $86 billion Nasdaq debut in April 2021.
In May this year, Armstrong was forced to issue a statement declaring Coinbase has “no risk of bankruptcy” after the company’s quarterly report added a risk disclosure that warned if the company were to file for bankruptcy, the court might treat customer bitcoin, ethereum and other cryptocurrencies as Coinbase’s assets.
The crypto price crisis has been exacerbated by multiple companies falling into bankruptcy this year, culminating in the shock collapse of major exchange FTX last month—something Armstrong branded a “massive fraud.”
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The bitcoin price has collapsed by around 75% since late 2021, dragging down the ethereum price and … [+]
“It appears that [FTX] took customer funds from their exchange and actually commingled them or moved them into their hedge fund and then ended up in a very underwater position,” Armstrong said. “And that was, I believe, against their terms of service and against the law.”
Some fear the bitcoin price could fall much lower next year, potentially pushing more companies over the edge.
“Bitcoin has held despite the S&P 500 dropping significantly this week, which could be a sign of strength in the short term,” Marcus Sotiriou, market analyst at crypto broker GlobalBlock, wrote in an emailed note. “However, technical analysis suggests we could have some downside in the short term for bitcoin.”
