Major trading platforms Coinbase and Robinhood have posted a below-expected Q1: stock price fall
The main platforms: Coinbase and Robinhood
As explained in a previous article, the platforms in question are two trading portals with an attractive interface and great ease of use which, however, differ in some features.
While Robinhood was born as a platform aimed only at the American basin, the other has a more international scope, is present almost everywhere in the world except in states where you can not trade crypto.
Coinbase offers the possibility only to trade cryptocurrencies, and when you first sign up you are asked for your credentials, and you are provided with a KYC that allows you to trade, and it can be used both via app and via the website.
Transactions follow a deposit from your Iban in euros or dollars, or if possible by credit card.
Robinhood, on the other hand, offers a wider range of possibilities. Within this it is possible to trade crypto but also ETFs, stocks and options.
The exchange system is always done by depositing an account through the trade section of the site.
Declines in share values
Goldman Sachs is sending a cold shower to the platforms in question, as in-depth analysis suggests that they are heading for a below-expected Q1 for both.
Following the words of analyst Will Nance (Goldman Sachs), Robinhood left 5% of its value in the field.
The analyst had downgraded the US platform’s shares to sell.
The well-known crypto exchange Coinbase did not suffer a very different fate from its trading colleague.
In fact, the blue platform lost 2.5% of its share value following forecasts of a quarter well below expectations.
The first quarter of 2022 proved unpleasant for crypto prices, while 2021 had seen volatility in the value of e.g. BTC from $30,000 to $69,000. This quarter the range has been reduced ($35,000 to $45,000).
In spite of an excellent end to 2021, Robinhood and Coinbase both achieved targets in Q1 that were below expectations and in relation to the same period last year.
The former, with $363 million in revenue and $48 million from crypto, will see a year-on-year increase in absolute terms, while Coinbase, despite a record 2021 turnover, will go from $548 billion in trades to just $302 billion, according to the historic investment bank in the voice of Nance.
According to the Goldman Sachs analyst, Robinhood is moving towards a limited path to short-term profitability and this is not good for the stock.
The choice of the Lightning Network for transactions (the same system used by Twitter for tips and El Salvador for exchanges) will hopefully benefit Robinhood and save it from this transient turbulence towards a better Q2.