Black November for Coinbase (COIN) stock price

To the tune of red days since the beginning of November, Coinbase’s stock price registers -23%, including 10% in the last session alone.

Q3 earnings reflect Coinbase’s share price

The recent quarterly report brings no smiles and so the company finds itself at -50% over 2021 with a loss exceeding $545 million, compared to $400 million for the same period in the past year. 

Investors using the US platform have held up quite well and are discounting what is known in the jargon as the “cryptocurrency winter.” 

The bear market and the loss of value of the major crypto assets, combined with the macro situation, the aftermath of the war in Ukraine such as high energy prices, economic hardship, inflation and high interest rates, which have made the most superficial users pull away, has affected the core business dependant on monthly subscriptions. 

For example, Bitcoin from last year’s $69,000 (peak) lost more than 70% of its market value contributing to the decline in monthly subscriptions that stopped at 8.5 million users with MTU transactions during Q3. 

Last quarter the same figure reached 9 million users and in Q1 as high as 9.2 million MTUs, providing a measure of the severity of the problem and the fact that the trend is accelerating for the latter part of the year as well. 

This is why analysts’ forecasts were 7.84 million according to Street Account. 

Trading volume drops to $47 billion, a figure consistent with what the latest Earnings reported in the third quarter of the year. 

Retail transactions on the US exchange platform, were a further source of sorrow for shareholders touching $346.1 million without being able to hit expectations that the same analysts gave for $454.2 million in the quarter just past. 

A drop of $1.02 billion year-on-year did not please analysts, investors and the CEO himself. 

The platform’s problems 

As a result of some technical changes, Coinbase over the past few days has been experiencing some glitches immediately highlighted by the community on Twitter. 

The disruptions arose at the same time as a volatile and tumultuous market that took almost everything into the red zone. 

The technical problems appeared as a result of insufficient connection to run Coinbase.com, Coinbase Pro and Coinbase Prime well.

“We have implemented a fix and the latency has greatly improved. Due to the high level of registrations and transfers of new users to Coinbase today, some customers have had problems registering or have encountered delays in accessing.”

These are the statements from the Coinbase exchange.

The news that Binance wants to acquire the FTX cryptocurrency exchange has not gone under the radar to the point that Alesia Haas, chief financial officer had to run for cover by distancing herself from the token.

“Coinbase and our customers are in no direct liquidity or credit risk. Regardless of the completion of the Binance / FTX transaction, we have very little exposure to FTX and we have no exposure to its token, FTT.”

Coinbase consciously has protected itself over time by investing minimally in its competitors, such as FTX or Binance.

Despite these cautions, the stock collapsed, with FTX failing to withstand the brunt of the shorts, after the market reacted badly to concerns about the company’s accounts dragged down by the FTT deal to its lowest since early 2021.

Right around the time of the collapse, the CEO of Binance CZ announced that it will soon start using the Proof of Reserve system i.e., a system very similar to fractional reserves used by credit institutions such as banks, funds, and insurance companies in classical finance. 

The trend of Coinbase’s listing on the stock exchange

Coinbase Global Inc (COIN) yesterday dropped as much as 10%, losing 1.22% during extended trading following investor concerns and mass shorts on the FTX cryptocurrency exchange.

The volatility that has pervaded the digital currency sector began when Changpeng Zhao announced on Twitter that Binance would sell all of the FTT shares it held on the exchange. 

Coinbase, which boasts 226,965,619 total shares outstanding, touches $45.98 leaving another $5 a share on the field with a performance of just under -10% returning to similar values on 12 June 2022. 

Compared to the same period, the stock loses as much as 85.4% in one year, confirming itself along with FTX as the sector’s black jersey.  

In essence, FTX’s shorts have affected the entire crypto world, both Binance itself and, of course, Coinbase, leading to that famous -85% year-on-year loss that gives the figure of what has been lost by what only a year ago was considered the largest exchange in the world. 

The FTX-Binance deal has brought a flurry of mass selling on cryptocurrency assets in general, hoping that this will cease soon, in the meantime even today losses are expected everywhere for both currencies and in stocks related to the sector according to futures.