Coinbase Stock Fluctuates as Analysts Analyze Q4 Data

Coinbase Stock

Coinbase Stock (NASDAQ:COIN)

On Wednesday, after rising as high as 8% earlier in the session, shares of cryptocurrency exchange Coinbase Global (NASDAQ:COIN) fell 5.7% in early afternoon trade as sell-side analysts evaluated the company’s mixed performance in the fourth quarter.

In Q4, Coinbase saw a decline in transaction revenues of 86% year over year to $322M and a decline in overall average daily volume of 73% year over year to $1.6B as a result of the prolonged market slump.

Some positives did emerge, however. Interest income increased, pushing subscription and services revenues by 33% Y/Y to $282.8M. That and the company’s attempts to decrease costs pushed the company’s profit and sales numbers to just beat the estimates of Wall Street.

Coinbase’s year-to-date ADV of about $1.7B increased by 6% over the previous quarter, according to a note by Raymond James analyst Patrick O’Shaughnessy. This coincides with a general “comeback” in crypto values. His overall COIN rating, however, remained at Underperform.

Yet, “regulatory uncertainty will continue to provide headline risks not only for COIN but for the overall sector,” added Oppenheimer analyst Owen Lau, who also regarded COIN with an Outperform rating.

As part of its efforts to exert control over the growing area, the U.S. Securities and Exchange Commission has, in recent weeks, indirectly targeted three of Coinbase’s business lines: stablecoins, staking, and custody. See out The Digital Trend’s justification for thinking the SEC’s crypto crackdown is good for COIN and why you should.

At the company’s quarterly earnings call, CEO and Co-Founder Brian Armstrong remarked, “I think this [regulation] is a positive thing for the sector and that it will eventually help Coinbase.” We need new laws and more clarity in the United States on existing regulations.

Coinbase stock is down on the day as bitcoin (BTC-USD), and other major tokens retreated before releasing the Federal Reserve meeting minutes on January 31 and February 1. During that meeting, the Federal Open Market Committee raised interest rates by 25 basis points.

As early as May 2022, SA warned that negative EPS revisions and slowing growth put Coinbase stock in significant danger of underperforming.

Featured Image: Unsplash @ PiggyBank

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