COINBASE - To dip or not to dip 📉📈
-The big U.S. indexes ended another volatile week in the red, led by a more than 2% retreat in the Nasdaq. The struggle between growth and value remains, as tech stocks continue to struggle. Inflation fears were boosted by higher than expected Consumer Price Index and Producer Price Index figures, leaving investors to keep a close eye on what the Federal Reserve may do next.
-Bitcoin and cryptocurrency-related stocks are on a wild ride after Tesla (TSLA) CEO Elon Musk lit up Twitter over the weekend with comments suggesting the EV maker may have sold its remaining Bitcoin. Musk later clarified that Tesla has not sold any Bitcoin. Within hours of his initial comments, Bitcoin fell below $43,000, according to cryptocurrency tracker Coinbase (COIN).
-Crypto platform Coinbase late Thursday reported first-quarter earnings of $3.05 per share, or $771.51 million, on revenue of $1.8 billion from $585 million in the previous period. The results were mostly in line with investor expectations and matched the company's preliminary report that was released ahead of its April 14 listing on the Nasdaq. Investors were expecting Coinbase COIN, -5.46% to report EPS of about $3.07 on revenue of $1.814 billion.
-The company said that monthly transacting users, or MTUS, more than doubled to 6.1 million from 2.8 million in its previous three-month period. Coinbase also boasts 56 million verified users. The company says it expects user growth between 5.5 million and 9 million.
-Trading volume came in at $335 billion, with around $120 billion consisting of retail investors and $215 billion from institutional investors. Bitcoin and Ethereum, another cryptocurrency, drove a large portion of that volume.
-Coinbase logged operating expenses of $813 million during the quarter. Transaction expenses from the higher trading volume, as well as an increase in account verification fees and payment processing fees, pushed costs higher.
Competition is increasing:
-"Competition is increasing as new market entrants join the crypto economy every month," Coinbase said in a letter to shareholders on Thursday. "Our competitors are supporting certain crypto assets that are experiencing large trading volume and growth in market capitalization that we do not currently support, as well as offering new products and services that we do not offer."
-During its earnings conference call, Coinbase said it would begin allowing trading of Dogecoin in roughly six to eight weeks. But it sees a future with "millions of different crypto assets," which would have to meet its security and compliance protocols.
-When asked about how it can keep apace with potentially cheaper fees elsewhere, management said it wasn't focused on competing on fees. Its biggest focus, it said, was meeting demand. Coinbase also outlined a scenario where it could offer other companies — in finance or elsewhere — technological assistance in handling digital assets. Its Coinbase Cloud service, it said, was its "AWS for crypto."
-Coinbase's fortunes hinge on people's interest in investing in Bitcoin and other cryptocurrencies. The exchange has warned that demand trends are "inherently unpredictable" due to the volatility in crypto prices.
Crypto Fear & Greed Index:
Currently standing at 27, a drop from last month's 76, the index stands at a very bearish level.
Our Opinion on COINBASE:
We recommend waiting through these volatile times where it is unpredictable whether the cryptos will get into the correction or will rise furthermore. Coinbase needs to determine the ground of support for a rise back which it hasn't determined yet. For now, we are just floating in the middle of nowhere. The closest potential support can be seen at 243-244. If it dips below this level, a bearish continuation is to be expected.
-Bitcoin and cryptocurrency-related stocks are on a wild ride after Tesla (TSLA) CEO Elon Musk lit up Twitter over the weekend with comments suggesting the EV maker may have sold its remaining Bitcoin. Musk later clarified that Tesla has not sold any Bitcoin. Within hours of his initial comments, Bitcoin fell below $43,000, according to cryptocurrency tracker Coinbase (COIN).
-Crypto platform Coinbase late Thursday reported first-quarter earnings of $3.05 per share, or $771.51 million, on revenue of $1.8 billion from $585 million in the previous period. The results were mostly in line with investor expectations and matched the company's preliminary report that was released ahead of its April 14 listing on the Nasdaq. Investors were expecting Coinbase COIN, -5.46% to report EPS of about $3.07 on revenue of $1.814 billion.
-The company said that monthly transacting users, or MTUS, more than doubled to 6.1 million from 2.8 million in its previous three-month period. Coinbase also boasts 56 million verified users. The company says it expects user growth between 5.5 million and 9 million.
-Trading volume came in at $335 billion, with around $120 billion consisting of retail investors and $215 billion from institutional investors. Bitcoin and Ethereum, another cryptocurrency, drove a large portion of that volume.
-Coinbase logged operating expenses of $813 million during the quarter. Transaction expenses from the higher trading volume, as well as an increase in account verification fees and payment processing fees, pushed costs higher.
Competition is increasing:
-"Competition is increasing as new market entrants join the crypto economy every month," Coinbase said in a letter to shareholders on Thursday. "Our competitors are supporting certain crypto assets that are experiencing large trading volume and growth in market capitalization that we do not currently support, as well as offering new products and services that we do not offer."
-During its earnings conference call, Coinbase said it would begin allowing trading of Dogecoin in roughly six to eight weeks. But it sees a future with "millions of different crypto assets," which would have to meet its security and compliance protocols.
-When asked about how it can keep apace with potentially cheaper fees elsewhere, management said it wasn't focused on competing on fees. Its biggest focus, it said, was meeting demand. Coinbase also outlined a scenario where it could offer other companies — in finance or elsewhere — technological assistance in handling digital assets. Its Coinbase Cloud service, it said, was its "AWS for crypto."
-Coinbase's fortunes hinge on people's interest in investing in Bitcoin and other cryptocurrencies. The exchange has warned that demand trends are "inherently unpredictable" due to the volatility in crypto prices.
Crypto Fear & Greed Index:
Currently standing at 27, a drop from last month's 76, the index stands at a very bearish level.
Our Opinion on COINBASE:
We recommend waiting through these volatile times where it is unpredictable whether the cryptos will get into the correction or will rise furthermore. Coinbase needs to determine the ground of support for a rise back which it hasn't determined yet. For now, we are just floating in the middle of nowhere. The closest potential support can be seen at 243-244. If it dips below this level, a bearish continuation is to be expected.
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