What’s Going On Here?Coinbase reported weaker-than-expected results late on Tuesday, after America’s biggest cryptocurrency exchange struggled with that all-too-familiar summertime slump. What Does This Mean?Coinbase’s performance – and here’s the sort of hot-button analysis you come to Finimize for – depends heavily on the performance of cryptocurrencies. And given that the prices of those digital rascals dipped last quarter, the company saw the average number of active monthly users and the value of their trades drop by around 16% and 29% respectively versus the quarter before. That in turn pushed the company’s overall revenue down by a worse-than-expected 39%. Coinbase did say it’s expecting things to pick up again this quarter, and the early signs look good: bitcoin hit record highs earlier this week. But investors aren’t the forgiving type, and they sent its stock down 13%. Why Should I Care?The bigger picture: G2G, BTC. U OK, NFT?
Bitcoin has always had a big influence on Coinbase’s revenue – arguably too big, which is why the company’s been trying to wean itself off its reliance on the OG crypto. It seems to be succeeding: 19% of all trades were on bitcoin last quarter, down from 32% the same time last year. That also means it’s expanding into new revenue sources, with the company announcing plans last month to launch a dedicated NFT platform.
Zooming out: What goes up…
After the update, Coinbase’s stock was sitting 20% below its price when it first listed on the stock market. Rivian, then, will be hoping not to follow in its footsteps: the US electric truck-maker made a barnstorming stock market debut on Wednesday, raising nearly $12 billion in the sixth-biggest IPO ever on an American exchange. That valued the Amazon-backed company at $76 billion, which, on the one hand, makes sense: it’s already seen massive demand, with more than 150,000 preorders. On the other hand, it’s just nuts: the vehicle-maker hasn’t actually sold a single vehicle yet. | 