Coinbase (COIN): the stock of the cryptocurrency exchange falls

At the end of last week, the quarterly financial and economic data of crypto exchange Coinbase was released

Although this data turned out to be better than expected, shares still lost ground on the stock market. 

The quarterly report of the Coinbase exchange

That 2023 was a lean year for crypto exchanges was already known, and no one thought Coinbase would be an exception. 

What’s more, from April to June the company was under the SEC’s scrutiny, and that certainly was bound to have no positive effect.  

Thus, the markets expected disappointing economic results. 

The assumption that had been circulating was that revenues would be less than $630 million, that is, down sharply from more than $760 million in the first quarter. 

Instead, the loss was only 8%, as the actual figure was just under $710 million. 

Net revenues were also found to be only slightly lower, or $663 million (10% less than the first quarter). 

Operating expenses were also down, but only by 1% to $664 million. 

So despite an Adjusted EBITDA of $194 million, the quarter ended with a net loss of $97 million. 

On the one hand, these are improved numbers compared to expectations, but on the other hand, they are still not quite as good mainly due to the fact that operating expenses are not falling, and it is hard to imagine that in the third quarter of the year revenues will grow significantly. 

Coinbase’s share price on the stock exchange

Friday’s session had opened with COIN’s share price at $89, down sharply from Thursday’s close, and closed lower at $87. 

During the post-market, and in today’s pre-market, it did not deviate much from Friday’s close. 

It is worth noting that in mid-July it had lateralized for a few days around $105, so since then the loss has been 17%. 

However, the current values are still far above the 2023 low, which was touched in early June below $47, excluding the first days of the year when it was rising from the 2022 lows. 

Indeed, the 2022 lows were recorded in December below $32, which is also the all-time low so far. 

It is important not to forget that Coinbase stock has only been listed on the exchange since April 2021, and since then it has practically been a downhill slide. 

Debuting in the midst of a bubble inevitably leads to losses in the medium/short term later on, although during the second bull run of 2021 the price had recovered somewhat. 

The current price is in line with levels from late May 2022, that is, after the crypto markets collapsed due to the implosion of the Terra/Luna ecosystem. 

Although the losses from the highs are greater than those of Bitcoin, in the event that there is a recovery in the price of BTC, and crypto markets in general, a sharp recovery in Coinbase stock can also be expected. Alternatively, it remains difficult to imagine a recovery. 

Why has the exchange’s COIN fallen

Focusing only on Friday’s session, it might seem strange that Coinbase’s stock price on the exchange fell despite a better-than-expected quarterly report. 

However, the problem is that while revenues were higher than expected, on the other hand, expenses remained essentially the same, raising fears that should the crypto markets not rebound soon, the third quarter of 2023 could also be closed with a heavy loss. 

In other words, while the recent past appears not to have been disastrous, there are still serious doubts about the medium/long-term resilience for the exchange’s coffers. 

Markets care much more about the future than the past, so fears about the company’s future are weighing more heavily than the results of the recent past. 

According to some analysts, the price could fall further, down to $82, and a solid return to above $115 would be required before the downward trend that has been going on for more than two years could be considered truly over.