Coinbase is in Danger of Ending the Year on a Negative Trend as Stocks Plummet Dramatically Over a Few Days.

The largest crypto exchange in the United States, Coinbase records an all-time low price in its stocks, which may cause it to end the year on a downward trend if the price doesn’t rise. Coinbase is not the only crypto giant caught in the harsh crypto winter and recorded either low earnings or a crash in stocks and prices, with others even collapsing. 

The Coinbase stocks (COIN) recorded an all-time low of $32.40 per share, dropping 6% over six days while it has recovered and is now trading at $32.65 pre-market. It indicates how brutal the market has been for the crypto giant, with the company recording a plummet in stocks of over 87% over the year and an added 23.19% in just December. Coinbase being the third largest cryptocurrency exchange by its volume trade has received hit after hit, especially from the aftermath of the FTX collapse that triggered panic regarding the crypto space for the general public and for crypto law regulators who have begun putting things in place to create stricter crypto laws that may eventually cripple the crypto market in multiple ways.

The company’s revenues have also been in shambles as they recorded a $576 net income for the third half of 2022, which is a 28% downgrade from its $803 million in the previous quarter. In addition to that, the transaction revenue that the crypto exchange derives most of its revenue from fell over a 44% quarter-over-quarter as there were lesser active users on the exchange, as a result of the harsh crypto winter, even with Coinbase taking the challenging route of laying off 1100 of its employees to shore up its finances, which is at least 18% of its workers, it has not done as much in helping the company recover or reduced the plummet in net revenues.

However, this has not stopped some big-time investors from letting them know their confidence in the crypto exchange. Investment company House Ark invest continued their strategy of purchasing Coinbase stocks, adding 296,578 Coinbase shares to their exchange-traded funds as of the 21st of December. 

The market may have been harsh for Coinbase. Still, it was a general downtime for tech companies this year as several other companies recorded plummets in stocks and net revenue, with many also choosing the path of laying off workers, including Twitter, Meta, and other crypto companies like Kraken, with these companies laying off at least 10% of their workforce to reduce excessive spending and to save up revenue.

The Nasdaq composite that has Coinbase listed is also down by a large percentage of 34.40% for the year so far. Coinbase has supposedly done much better than many other crypto exchanges in the market, especially the mining firms, with Bitcoin mining firms Riot Blockchain and Marathon Digital Holdings falling around 84.96% and 90.15%, respectively.

The crypto market had recorded enormous losses for most of the year, which is a massive contrast to how it started the year, with ETH and BTC recording their highest prices, which soon fell through when the crypto winter started to hit, and all prices went down the drain. The collapse of FTX was an added blow to the crypto market, as it dragged down the costs of cryptocurrencies even further and pulled down crypto companies that had been exposed to it. 

Conclusion

Regardless of how low the net revenue of Coinbase is and how scarce its stocks plummeted, the crypto exchange has done way better for itself, even in the harsh crypto winter, than a large number of crypto exchanges have been able to do. It has also managed to keep its company afloat amidst the panic that has plagued the crypto market as of late. With stricter crypto regulations and countries opting to place heavy bans on the crypto market, it has stayed at the top of the market.

Coinbase could have a chance to bounce back in the coming year if it figures out an effective way to stay afloat amidst the trouble that has plagued the crypto space for a while now, or it could continue on its current path and remain on top while not recording high revenues like that of its previous years.