Coinbase Global Inc. is facing a high downtrend in the market and in the crypto industry. America’s number one global investment bank Goldman Sachs has listed Coinbase shares to sell from neutral. The shares have plummeted to a significant level that now the bank is compelled to target them as ‘sell’ with as low a price as $45.
Coinbase is facing a hard time in the sudden crypto bear market that it has to lay off almost 18% of its human workforce. The plunged cryptocurrency market and affected crypto prices have resulted in noteworthy losses in crypto exchanges and other inherited businesses.
According to analysts at Goldman ‘Coinbase will have to make substantial reductions again in its costs in order to stem out resulting cash burns due to dry market’.
If compared to last year, Coinbase’s share prices have fallen to -77%, according to NASDAQ. Last year at this time, it was priced at $246 whereas today the shares are trading at $56. Its all-time highest price was in November 2021 $357.
As of now, Coinbase has launched its first Bitcoin derivative product. To curb the substantial losses Coinbase is determined to generate revenue with derivatives. Whereas, the analysts have suggested that Coinbase has to invest a generous amount of time to yield a good amount of revenue which they certainly don’t have at present. Also, the Bitcoin derivative will be available for trading on third-party platforms.
Moreover, with the fastly growing competition for more users, Coinbase’s market has been divided drastically. The Binance U.S. has launched zero-fee trading for dollar-based pairs. This profusely taken decision will certainly corrode the former’s dominance in the market.