{"id":80545,"date":"2023-11-04T04:13:58","date_gmt":"2023-11-04T08:13:58","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/coinbase-stock-falls-after-earnings-trading-volume-slumps\/"},"modified":"2023-11-04T04:14:15","modified_gmt":"2023-11-04T08:14:15","slug":"coinbase-stock-falls-after-earnings-trading-volume-slumps","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=80545","title":{"rendered":"Coinbase Stock Falls After Earnings. Trading Volume Slumps."},"content":{"rendered":"
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Coinbase Global beat analysts\u2019 estimates of profits and revenues in the third quarter, despite seeing trading volume continue to slide. <\/p>\n

Investors don\u2019t appear impressed. The stock was down 2% in premarket trading Friday to $82.90, after rising 8.7% in Thursday\u2019s regular session.<\/p>\n

\n

\n Coinbase
\n (ticker: COIN) on Thursday disclosed a third-quarter loss of one cent per share, compared with the 55-cent loss expected by analysts, according to FactSet. The company had revenue of $674 million, compared to the consensus estimate of $651 million. <\/p>\n

It was the seventh-straight quarter of losses for Coinbase, which has struggled in the wake of 2022\u2019s crypto industry crash and dampened trading volumes.<\/p>\n

Coinbase\u2019s earnings were helped in part by increased \u201ctake rates\u201d charged to retail traders, said Mizuho analyst Dan Dolev in an earnings note after the release. Those rising fees have also helped earnings in prior quarters, but Dolev and some other analysts have argued that the trend won\u2019t last amid increased competition for traders with firms like
\n Robinhood Markets
\n (HOOD).<\/p>\n

\u201cDespite the \u2018beat,\u2019 we expect a muted stock reaction,\u201d wrote Dolev, whose firm rates Coinbase \u201cUnderperform\u201d with a $27 price target.<\/p>\n

Still, Coinbase\u2019s loss was much narrower than the second quarter\u2019s per-share loss of 42 cents. In the third quarter of last year, the company lost $2.43 a share, when the crypto crash was deepening.<\/p>\n

Critically, Coinbase and other trading platforms have seen less interest from retail investors. In the third quarter, Coinbase said it had $76 billion in total trading volume, compared to $92 billion in the second quarter and $159 billion in the third quarter last year.<\/p>\n

The company said its gathered $289 million in transaction revenue in the quarter, as well as $105 million in October, after the quarter ended. Coinbase executives in the shareholder letter said October\u2019s figure shouldn\u2019t be extrapolated.<\/p>\n

There are reasons for investors to be optimistic that the muted volumes and weak prices that dominated the crypto markets this summer are behind the company. Since the end of the third quarter, the price of Bitcoin has risen 29% to about $34,900. Trading platforms including Coinbase have also seen a rise in volume.<\/p>\n

Coinbase Chief Financial Officer Alesia Haas in an interview pointed to speculation surrounding the potential approval of a spot Bitcoin exchange-traded fund as one of the drivers. While she declined to forecast whether the trading bump would last, Haas said there are other potential catalysts on the horizon that could continue to bring interest.<\/p>\n

Among those are rising geopolitical tensions, which Haas said has attracted investors to Bitcoin as a store of value, and an upcoming 2024 change in the Bitcoin network-\u2014called the \u201chalving\u201d\u2014that in the past has correlated with crypto bull markets.<\/p>\n

A potential Bitcoin ETF \u201creinforces the legitimacy of Bitcoin as an asset class\u201d and could bring more institutional investors into crypto, Haas told Barron\u2019s<\/em>.<\/p>\n

In addition to fighting to keep traders\u2019 interest in crypto, Coinbase has been battling regulators. In June, the Securities and Exchange Commission sued the company accusing it of operating an unregistered securities exchange, a charge the company denies.<\/p>\n

Coinbase has spent millions of dollars on a lobbying campaign to encourage lawmakers to pass legislation that company executives say would provide a clear path for crypto firms to operate legally in the U.S. While some of the bills have advanced through House or Senate committees, policy analysts say there\u2019s little chance for them to become law anytime soon.<\/p>\n

\u201cLegislation takes time. We have to be patient,\u201d said Haas of lawmakers\u2019 legislative push, adding that she believes it\u2019s \u201cgoing to be a matter of \u2018when,\u2019 not \u2018if\u2019 we get legislation.\u201d<\/p>\n

Write to Joe Light at joe.light@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Coinbase Global beat analysts\u2019 estimates of profits and revenues in the third quarter, despite seeing trading volume continue to slide. Investors don\u2019t appear impressed. The stock was down 2% in premarket trading Friday to $82.90, after rising 8.7% in Thursday\u2019s regular session. Coinbase (ticker: COIN) on Thursday disclosed a third-quarter loss of one cent per […]<\/p>\n","protected":false},"author":1,"featured_media":80546,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-80545","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nCoinbase Stock Falls After Earnings. 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