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Coinbase price alert: COIN stock price revives ahead of Tuesday earnings report

By Jenny McCall

15:30, 10 May 2022

A smartphone with the Coinbase logo on the screen
Coinbase (COIN)’s stock price surged on Tuesday ahead of its Q1 earnings report – Photo: Getty Images

Coinbase Global Inc (COIN)’s stock price surged on Tuesday, ahead of its first-quarter earnings release. Investors appear to be optimistic and were clearly ready to buy Coinbase stock, but should they be?

Coinbase’s stock price rose by over 6% on Tuesday, but its share price has been doing badly this year overall, and has plummeted 66% since 1 January.

What’s more, with the crypto market facing major volatility and macro headwinds such as inflation causing further problems, Coinbase (COIN) already warned investors – in its fourth-quarter statement – to expect lower volumes in its next earnings release.

So, can the Coinbase (COIN) stock price recover, at a time when bitcoin (BTC) is falling? Can Tuesday’s results provide the lifeline this stock needs?

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Coinbase (COIN) stock price 


Coinbase earnings come at ‘a difficult time’

“In many ways, Coinbase earnings have come at a difficult time. No doubt, these earnings will be inextricably tied to the trouble brewing in the cryptocurrency market at large,” Giles Coghlan, chief analyst at HYCM, told Capital.com.

“With a broader market sell-off to contend with, speculative risk assets like bitcoin are also failing to prove their ‘hedge’ credentials against inflation – right now, Coinbase is trading at almost a 52-week low, down 66% in the year to date,” Coghlan said.

But there is some hope. Coinbase (COIN)’s growth rate has been phenomenal: its revenue rose over 140% in 2020 and then surged even further in 2021, rising by over 500%. 

 

Promising partnerships

In October 2021, Coinbase and the National Basketball Association (NBA) announced a multi-year partnership that made Coinbase (COIN) the exclusive cryptocurrency platform partner for the NBA and the WNBA. So, there is a possibility that Coinbase’s earnings on Tuesday may offer a ray of hope to investors.

However, despite these positive moves, the warnings that Coinbase (COIN) issued in its fourth-quarter earnings release are still ringing in the ears of investors. Analysts believe it’s unlikely that the pressures of the broader cryptocurrency environment have not had some impact on the group’s results, which will in turn affect its stock price performance.

DOGE/USD

0.13 Price
-2.010% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BTC/USD

67,006.20 Price
-0.610% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

XRP/USD

0.59 Price
-2.050% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

ETH/USD

3,504.28 Price
-0.670% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

“Growth and recession anxieties have made for a very challenging environment for cryptocurrencies,” Coghlan said. “At the moment, BTC prices have been tracking prices in the Nasdaq very closely, so many traders have been looking at moves in the Nasdaq as early indicators of BTC/USD moves.”

Bitcoin to US Dollar (BTC/USD) price chart


“Likewise, Coinbase (COIN) warned investors during its fourth quarter that it was expecting much lower trading volumes and monthly transacting users for Q1, given the wider economic backdrop and geopolitical instability afoot,” Coghlan added.

Diversifying 

That said, Coinbase (COIN)’s recent move into the non-fungible token (NFT) market may offer further cause for optimism. This is the latest move by Coinbase (COIN) to try and diversify its revenue by launching new products.

Analysts believe there is a lot of growth to be had in the NFT marketplace, which could work in Coinbase’s favour.

“This is creating broader appeal for investors, who may be keen to look to more innovative digital assets, as well as signs that the Coinbase (COIN) name means more than just bitcoin,” Coghlan said.

Ethereum to US Dollar (ETH/USD) price chart


However, there are also those who see NFTs as a costly risk that perhaps should be avoided.

Dan Dolev, senior analyst for fintech equity research at Mizuho, said that the NFT marketplace is “costly”, and that “the party may be short-lived”.

Optimism ahead of results

“For now, investors would do well to heed these warnings, with more headwinds likely ahead for Q2 as central banks grapple with the ‘stagflationary’ environment and world conflict continues,” Coghlan concluded.

Coinbase’s results come at a pivotal moment, both for the organisation itself and the cryptocurrency industry as a whole. With its share price plummeting over the last few weeks but rebounding on Tuesday ahead of its earnings release, there is some hope that Coinbase (COIN) stock may yet bounce back.   

Markets in this article

BTC/USD
Bitcoin / USD
67006.20 USD
-414.25 -0.610%
COIN
Coinbase Global Inc (Extended Hours)
256.98 USD
21.13 +8.980%
ETH/USD
Ethereum / USD
3504.28 USD
-23.59 -0.670%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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