As an analyst with over two decades of experience in the financial markets, I’ve seen my fair share of market cycles and trends. Coinbase Global Inc.’s third-quarter revenue growth expectations are indeed promising, but it’s important to remember that the crypto market is notoriously volatile and unpredictable.
As a crypto enthusiast, I’m eagerly anticipating the financial results that Coinbase Global Inc. will unveil for the third quarter. The forecast suggests a substantial increase in revenue, potentially even doubling what we’ve seen in recent periods. If this holds true, it could pave the way for the company to reclaim its profitability status.
Yet, a number of investors remain hesitant towards Coinbase due to the decrease in activity from individual traders when it comes to buying and selling cryptocurrencies.
According to analyst John Todaro from Needham & Co. Inc., they tend to reappear later in the cycle, though he notes that the data for the fourth quarter may not fully demonstrate this pattern yet. He maintains a “buy” rating on Coinbase.
As Bloomberg’s report indicates, Coinbase shares have experienced a roughly 27% increase so far this year. However, this growth pales in comparison to Bitcoin‘s impressive 70% surge over the same timeframe. Moreover, the Coinbase stock is currently about 40% lower than its high point during the crypto market boom towards the end of 2021.
The decline in enthusiasm can be attributed, in part, to a decrease in retail investors, as they seem to have waned in their interest following Bitcoin’s price halt in its upward trend in March. Moreover, the number of searches related to “Bitcoin” on Google has reached its lowest point in the past year.
Data from Coinbase’s mobile application aligns with this pattern. Over the past year, there has been a decrease of approximately 6% in monthly users as reported by Sensor Tower. In contrast, Binance, the leading cryptocurrency exchange, has experienced a 20% growth in active users and a 94% surge in app downloads during the same timeframe.
Moreover, it’s worth noting that during the third quarter, Coinbase’s market share in spot trading dipped slightly from 4.51% to 4.18%. Meanwhile, competitors such as Crypto.com and Bybit expanded their offerings by providing more tokens, resulting in an increase in market share, based on information from CCData.
To lessen its dependence on traditional retail trade, Coinbase has shifted its focus towards institutional trading and non-trading offerings, and these now account for almost half of its total income.
Nonetheless, some analysts remain cautious. Oppenheimer analyst Owen Lau expressed caution, saying, “it won’t be a good quarter for Coinbase.”
He thinks that things might get better following the U.S. presidential election, as it could lead to the introduction of fresh crypto regulations that could potentially be advantageous for the company.
Also : Coinbase CEO offers wallet to AI influencer behind GOAT coin
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2024-10-30 18:44