Wall Street analysts made a mixed judgment on Coinbase (Coin) after its Miss of the first quarter results and an acquisition of $ 2.9 billion, with short -term demotion forecasts and others indicating long -term strategic victories.
“The results of the Q1 came a little below expectations and prospective advice for [subscription and service] Income and April [transaction] The volumes were affected by markets and mixtures of softer crypto, “Benjamin Buddish of Barclay, which maintained an” equal weight “, wrote in a report.” Otherwise, Coin saw beautiful gains of transactions both to the point and in the future in the first quarter, and remains completely optimistic. “”
The US-based exchange crypto has a decrease of 12% larger than strengthening its income from the previous quarter to $ 2.03 billion. Transactions income dropped by $ 1.3 billion, increasing the red flags for the current period. Several analysts, including Keefe, Bruyette & Woods and JPMorgan, lowered their revenue projections in the second quarter and annual, citing a lower rate of costs and lighter institutional activities.
The retail trade remained stable, but the institutional income took a hit. JPMorgan reported the drop in income from the institutional volume of 30% quarters and a drop in institutional costs from 4.1 to 3.1 base points, pulled by incentives, discounts and a heavier presence of high frequency merchants.
However, the acquisition of $ 2.9 billion in deribit, the main world exchange of crypto derivatives, has stood out as a daring bet on the future of derivatives.
The agreement, which should end before the end of the year, aroused the praise of Bernstein (with an outperformance note), which called the annual volume of 1.2 billion of dollars of drinks and $ 30 billion in open interest. Canaccord Genuity (purchase rating) said that acquisition gives Coinbase Strength on an international scale and aligns it for a possible American regulatory authorization of crypto options.
While revenue exchanges collapse, the scholarship is based on other growth levers. Subscription and services income increased by 9% to $ 698 million, stimulated by the adoption of Stablescoin. The USDC on Coinbase sales jumped almost 50% to $ 12.3 billion and the sales in platform jumped $ 39% to $ 42 billion. The average sales by user has tripled since June 2023, noted Canaccord.
The company’s strategy also includes the expansion of its “Coinbase as a service” model – the white marque infrastructure for institutions that seek to enter the cryptography market. Canaccord analysts say it could become a key income pillar, offering coverage against volatile negotiation cycles.
“We have heard many anecdotal data points at this stage of the infrastructure players of Tradfi and Crypto-Native that [versus] The construction strategy is the most likely scenario if this industry evolves quickly, “said Canaccord analysts.
Oppenheimer (outperformance) and Barclays have emphasized macroeconomic risks, including uncertainty linked to prices and the weak feeling that has caused volumes in April and until now in May. Hopes of regulatory clarity have undergone a setback when the Act on Engineering – a Senate bill focused on stables – was blocked earlier this week. Despite this, JPMorgan said that management remained optimistic that progress in legislation could resume before the August recreation.
Coinbase still considers itself as central to the evolving cryptography ecosystem. Although the immediate prospects are darken by low volumes and pressed costs, many analysts claim that the continuation of enlarging products of the exchange, the position of the dominant American market and the advantage of early appointments in derivatives and infrastructures have put it in place in the long term.
As Canaccord said, Coinbase remains “the ordeal” for institutional and detail in digital assets – even if it has to navigate in restless waters in the short term.
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