CryptoMay 5, 2022
Coinbase’s NFT marketplace flops; what investors can expect going into earnings
Digital Assets
Victor Lei
Discover
Coinbase doesn’t deserve an exclamation point on its birthday — not after the horrid returns it delivered since going public.
Next week on May 10, Coinbase is expected to report its first-quarter earnings report. Here’s what investors can expect.
At a conference this week, the CEO of Coinbase, Brian Armstrong, gave investors several reasons to be bullish on crypto (BBG) — expecting:
1/ “We’ll see a substantial portion of GDP happening in the crypto economy,” with 1B people having tried crypto within 10 years — 5x the current amount.
2/ “50% or more people in Washington are pro-crypto now.”
On April 20, Coinbase launched its long-awaited NFT marketplace into a slow and increasingly competitive NFT market:
Coinbase isn’t the only one launching an NFT marketplace — they are among Kraken, Okcoin, GameStop and dozens of others. On Wednesday, Coinbase’s marketplace opened to the public — but the reception was even worse, with only 150 new user sign-ups.
Last week, Robinhood’s earnings report showed a significant drop in trading activity, foreshadowing a weak quarter for Coinbase. Next up, Coinbase faces a lot of uncertainty in its coming earnings report.
Reliant on/ETH: At the end of 2021, trading made up 93% of Coinbase’s sales — and and made up 45% of this volume. Despite falling from 56% in 2020, Coinbase is still heavily reliant on these two tokens.
Contrarian view: Per Arca’s Chief Investment Officer Jeff Dorman (BBG), most analysts don’t see Coinbase expanding outside trading revenue in a “meaningful way.” But Dorman thinks they’re wrong. Instead, he believes “fundamentally, it’s just the cheapest stock in the world.”
is down 56% compared to, down 25% in the past year. Looking at returns, would have been a better investment, but there are pros and cons with each:
’s recovery depends on a crypto rebound — but will crypto rise again? Ask any crypto enthusiast, and the answer will likely be a resounding yes. But ask Warren Buffett, and he wouldn’t even buy all the in the world for $25.
