Coinbase Stock (NASDAQ:COIN)
Coinbase Global’s (NASDAQ:COIN) transaction volumes, which account for a substantial amount of the company’s overall income, basically halted from the previous quarter, according to a note written by Bank of America analyst Jason Kupferberg, who cited data from CoinGecko. This was the case even though cryptocurrency prices increased during the first quarter of 2023.
According to the note, the transaction volumes of the cryptocurrency exchange in the first quarter were approximately flat Q/Q at $145B, which was below the forecast of Wall Street of $169B. On May 9, Coinbase is anticipated to release its quarterly earnings.
According to statistics provided by Sensor Tower, the number of downloads of the COIN app dropped by 6% from the previous quarter, bringing it to its lowest quarterly figure since the third quarter of 2020. On the other hand, bulls may be dissatisfied, as they may have anticipated that the failure of another cryptocurrency exchange, FTX (FTT-USD), would provide a chance for Coinbase to gain market share after it occurred a year ago.
The interest income received on USD Coin (USDC-USD), the second-largest stablecoin in terms of market value, is another important source of revenue for COIN. According to Kupferberg, who has maintained his Underperform rating on COIN stock, “While we do not see much risk to COIN’s 1Q interest income, USDC’s market cap has fallen 24% since the bank crisis started [last month], which could add risk to interest income tests over the next few quarters.”
After getting a notice that SEC staff urged enforcement action against the firm for allegedly breaking securities laws, Coinbase is also battling regulatory headwinds, making the situation more difficult.
In the early morning trade on Thursday, COIN stock had a gap of 3.9%, although it has surged 75.1% year-to-date, along with a larger rise among cryptocurrencies. A writer for Seeking Alpha named Kurt Christensen has expressed his opinion that the stock should be purchased “if you think cryptocurrency is sticking around.”
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