Coinbase Suffers Setback As Crypto Market Plummets
Coinbase, the world’s largest cryptocurrency exchange, will soon disclose its Q1 earnings report. However, its hopes have been crushed as its stock value in the cryptocurrency market continues to drop.
Coinbase Inc. will submit its quarterly report on the 10th of May, and its data may not be compared to the record-breaking figures the company posted for the Q4 of 2021.
As stated by FactSet, the company’s Q1 sales are expected to be $1.5B based on the average analyst forecast. Consequently, the company’s adjusted profits per share declined by one cent for each share.
This quarter’s revenue is expected to be between $1.24B and $1.92B, according to Yahoo! Finance. Depending on the estimates, earnings per share are expected to range between $0.68 to $2.02.
Cryptocurrency Activity Slows Down
Cryptocurrency exchange Coinbase derives almost all of its revenue from the transaction fee. Its fees are among the highest in the crypto industry. This year, the firm’s high transaction fees have been negatively impacted by the significant slump in cryptocurrency markets.
John Todaro, an equities research specialist at investment bank Needham & Co., stated that;
“Despite the decline in cryptocurrency activity, the Q1 was distinguished by a few sharp price fluctuations, which might result in bigger volumes when volatility increases. The period was characterized by a slow and continuous decrease, interspersed with times of variation in the market that resulted in very low trading volumes.”
Coinbase’s income is also influenced by other factors, including the poor reception of its hyped NFT market. Compared to its competitors, the firm only offered access to a small number of customers, resulting in low trading activity.
Additionally, Coinbase’s monthly transacting users (MTUs) are likely to have decreased during a quarter in which the cryptocurrency markets were primarily in consolidation. Since early January, most significant crypto assets have been trading in a narrow range.
The Value Of COIN Drops By 20%
Coinbase stock has taken a significant knock since the beginning of trade this week, indicating that Wall Street has factored in the company’s disappointing profit forecasts and expectations.
As per MarketWatch, on the 9th of May, COIN fell by 19.5% to close at only $83.45. Over the last month, its stock price has plummeted by a stunning 47%, higher than the entire cryptocurrency market recorded. COIN is presently trading at its lower price, dropping by over 75% from its high price of $342 in November.