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- COIN has fallen to $200 levels after trading at $300 levels last month.
- Coinbase is vastly dependent on transaction fees which means it requires an active user base.
- A significant increase in the transaction activity has been noticed since last year.
Coinbase Global Stock is heavily dependent on transaction revenues. Again transaction revenues rely on the crypto market. If the market is hot, income generated is automatically very high, and if not, the stock price plummets. The Coinbase Global Stock, which trades under the ticker COIN, has fallen to $200 after trading at $300 last month.
Current Downfall of Crypto may Impact Coinbase on a Long Term Basis
According to Barron’s post, COIN was listed directly last month. However, during its listing, Bitcoin was trading at its all-time high. More recently, it has crashed by almost 40% and is having a hard time correcting its value. As mentioned above, Coinbase’s revenue is an integral part of its profit. Hence, a cold crypto market certainly won’t be profitable for the company’s interest. A group of analysts thinks that considering the current downfall of the crypto market may have a tremendous long-term impact on Coinbase. On the other hand, analysts believe that Coinbase may bounce back by amplifying its user base and services.
Analyst Corrects his Price Targets and Revenue Estimates Ahead of Crypto Winter
The company is vastly dependent on transaction fees which means it requires an active user base. Coinbase has a total of 56 million verified users. However, monthly, only 6.1 million of them are occupied and transact regularly. However, a significant increase in the transaction activity has been noticed since last year. Before last year’s fourth quarter, an average of 4% of the user base was active on the Coinbase platform. This rose to 6% in the previous quarter of 2020, and in the first quarter of 2021, it grew to 9%.
Dan Dolev, an analyst from Mizuho, cut down his price target and revenue estimates because he thinks that the stock price of Coinbase may stop making progress. He believes it will be challenging for Coinbase to defend itself from a cold crypto market with bleak BTC and other cryptocurrencies. He estimates that Coinbase’s revenue may hit the $5.3 billion mark. Previously he estimated that the revenue would hit $5.6 billion.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
