- Coinbase share price has recovered modestly after its strong financial results.
- The company’s revenue and profitability was better than the median estimates.
- Coinbase confirmed that it will alway have a presence in the United States
Coinbase stock price jumped to $60 on Monday as the company reaffirmed that it will remain in the United States despite the ongoing challenges with the SEC. COIN shares jumped to $60, which was higher than last week’s low of $48.25. The shares jumped even as cryptocurrencies like Bitcoin, Litecoin, and Monero retreated.
Coinbase financial statement
Coinbase share price jumped last week after the company published better results than expected. In a statement, the company said that its net revenue jumped to 22% to $736 million. This revenue jumped as cryptocurrencies soared in Q1, with Bitcoin hitting a multi-month high of $31,000.
Transaction revenues jumped by 16% to $375 million while consumer revenue soared by 14%. Further, institutional revenue jumped by 67% while subscription revenue rose too 28% to $362 million. On the other side of the equation, the company said that operating expenses dropped by 24% as the company announced layoffs. For its guidance, the company said:
“We anticipate technology and development and general and administrative expenses will be between $600 million and $650 million and that sales and marketing will be between $80 million and $90 million. We expect higher general and administrative expenses due to higher legal expenses.”
Is Coinbase a good investment?
I believe that Coinbase is a good investment for three main reasons. First, the company is the most regulated in the industry since it is regulated by the Securities and Exchange Commission (SEC) and its financial statements are audited by Deloitte.
While these statements are not always perfect, they provide peace of mind to institutional investors like fund managers and pension firms. Therefore, if the industry continue growing, Coinbase will likely be the best beneficiary.
Further, as mentioned above, Coinbase is making money in the subscription segment. Subscription revenue jumped in the first quarter and the company expects that this revenue will be at $300 million. The decline in Q2 will be because of the sharp decline in USDC market cap, which has dropped by 23% recently.
Coinbase is also a good investment because I believe that Bitcoin and other cryptocurrencies will bounce back later this year. Some analysts expect that Bitcoin will jump to about $50,000 or even $100,000 in the coming months.
However, while Coinbase is a good investment, I recommend buying Bitcoin directly. Unlike Bitcoin, Coinbase is a company that can generate losses. Also, Bitcoin is not being targeted by the SEC and other regulators.
Coinbase stock price forecast
The daily chart shows that the Coinbase share price has been in a bearish trend in the past few weeks. Most of this decline happened as the company’s crisis with the SEC continued. The shares moved below the 25-day and 50-day moving averages.
Further, the shares have formed a double-top pattern at $85.54 whose neckline stands at $49.82. Therefore, the shares will likely continue falling as sellers target the next key support level at $31.35. A move above the resistance at $65 will invalidate the bearish view.
