Coinbase Global Inc (COIN), the largest cryptocurrency exchange in the United States, has suffered a significant loss in stock price in the past weeks, dropping nearly 30 percent. Despite this decline, famous investor Jim Cramer, who has sold Ethereum (ETH) and Bitcoin (BTC) in the past years, does not see this as an opportunity to invest in the company. Here are the details…
Is Coinbase going bad?
Cramer expressed his disappointment that Coinbase did not benefit from listings during the recent bank bankruptcies, as he thought it would become the JPMorgan of the cryptocurrency business. He stated that he would never touch the stock. On CNBC’s “Squawk Box,” he said, “Not for me, but for some people, I thought they were the JPMorgan of crypto. So the money was going to JPMorgan. It doesn’t seem so. If I were you, I wouldn’t touch this job at all,” he said.
Disappointed in Coinbase’s performance, cryptocoin.com This is further highlighted by the recent announcement that, as we reported, the company received a Wells notice from the Securities and Exchange Commission (SEC) for violating US securities laws.
Added to the negatives is that Bank of America analyst Jason Kupferberg, citing data from CoinGecko, said that Coinbase’s trading volume remained roughly stable in the first quarter, missing the consensus by $24 billion. This is particularly important as trading volume accounts for a significant portion of the company’s total revenue. Kupferberg also noted a 6.0 percent drop in downloads on Coinbase apps. He sees this as a cause for concern.
Ethereum and Bitcoin were sold
It should be noted, however, that Coinbase shares have been increasing year-to-date. This shows that despite the disappointments experienced in the last period, the company still recorded significant growth. On the other hand, Cramer stated that by selling all his Bitcoin (BTC) in 2021 and buying Ethereum (ETH) instead, people are actually using ETH to transact. However, he later sold his Ethereum position after learning that his bank did not want to accept ETH.
Cramer explained that he talked to executives at his bank about the storage of Ethereum and that they refused to accept ETH even though Cramer has been a customer for 30 years. Speaking on CNBC’s “Squawk On The Street” on December 6, 2022, he said, “And you know what, thank you. That was a great reason to sell,” he said. Cramer reminded crypto investors that it is never too late to sell.
Despite mixed opinions, we’ll see what the future holds for Coinbase. With the growing popularity of cryptocurrencies, it may be clear that the demand for cryptocurrency exchanges will continue to rise. However, it is not yet clear whether Coinbase will be able to maintain its position as the leading US cryptocurrency exchange.
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