Coinbase stock slipped this year, erasing over $38 billion in value, as crypto woes intensify.
After peaking at $350 in November last year, the company’s share prices plunged to $190, and technical patterns point to further downside.
Crypto prices have crashed this year
The ongoing crash happened as Bitcoin (BTC) and most altcoins plunged:
- Bitcoin fell from an all-time high of $109,400 in January to today’s price of $84,400.
- Similarly, Ethereum (ETH) has slipped from last year’s high of $4,100 to $2,000.
- The total market cap of all cryptocurrencies has dropped from over $3.8 trillion in 2024 to $2.76 trillion.
Coinbase is highly exposed to crypto prices. Historically, its business has boomed when prices rise, and vice versa. For example, its revenue surged to $7.3 billion in 2021 as most coins soared and then crashed to $3.1 billion in the following year as Bitcoin crashed to $16,000.
Full-year revenue for 2023 totaled $3.1 billion, and doubled in 2024 to $6.6 billion,
Fortunately, Coinbase has diversified its business in the past few years, so transaction revenue is not the only source of income. The most recent financial results showed that transaction revenue was $1.5 billion in the fourth quarter, while its subscriptions and revenue were $641 million.
Its subscription and services revenue is growing quickly, thanks to its stablecoin, blockchain rewards, custodial fees, and interest and finance fee income.
Coinbase is seeking to grow its business in other areas. For example, Base, its layer-2 blockchain network, has become the biggest player in the industry. Protocols in the network handled over $22 billion in volume in the last 30 days and have over $3.1 billion in total value locked.
Coinbase is also in talks to acquire Deribit for between $4 billion and $5 billion. That acquisition would make it a big player in the booming derivatives industry.
Coinbase is contending with rising competition in the crypto industry. Most of this competition comes from international players like OKX, HTX, and Binance.
Coinbase stock price is at risk of further downside
Wall Street analysts are highly optimistic about the COIN stock. The average estimate is that its annual revenue will grow 23.7% this year to $8.12 billion and $8.38 billion next year. These analysts expect Coinbase’s stock will rise to $318 from the current $189.
The daily chart shows that the Coinbase stock has formed two risky patterns that point to an eventual crash to $150. It has formed a bearish pennant pattern with its two triangle lines about to converge.
COIN is also about to form a death cross pattern, which happens when the 50-day and 200-day moving averages cross each other. Therefore, the stock is expected to have a strong bearish breakout in the next few weeks.
Coinbase was founded in June 2012 by Brian Armstrong and Fred Ehrsam. Armstrong currently serves as the CEO.
