No firm has suffered more damage from the billions of dollars lost in the bitcoin crisis than Coinbase. The biggest and first publicly listed cryptocurrency exchange in the country, Coinbase, has just revealed intentions to lay off one-fifth of its workforce as its stock price has fallen by 81 percent this year. Some hedge funds are beginning to short the company after Coinbase reported a $430 million first-quarter loss, indicating that Wall Street expects Coinbase’s value to decline much more.
Analysts, however, predict more bounce to the crypto bubble than the present drop shows, so all is not lost for the exchange. Despite its current difficulties, they believe Coinbase will survive and eventually prosper in this bear market for cryptocurrencies. Analysts claim that this is because the business has figured out how to endure such downturns.
Before the cryptocurrency boom or the current “crypto winter” struck the United States, Coinbase, which was formed in 2012, had already made a name for itself. With around 5,000 people and $256 billion in assets on the platform, it has already amassed a market capitalization of $13.8 billion.
According to John Todaro, a researcher with Needham & Co. who specializes in crypto assets, “Coinbase has gone through a couple of crypto winters and, each time, they plainly have survived.” For Coinbase to actually be in danger, the winter would need to become harsher. His optimism is boosted by Coinbase’s $6 billion in cash on hand. According to Todaro, the money will be “a fairly strong buffer” for Coinbase as it navigates challenging times. In addition to witnessing fewer transactions, cryptocurrency values have also fallen to their lowest points of the year.
This spring, as growing inflation tightened its hold on the American economy, the price of bitcoin, Ethereum, and other significant tokens began to decline. Investors started taking their money out of riskier assets like cryptocurrency as the price of necessities like gas and groceries rose. The price of cryptocurrency continued to decline as investors sold off their digital assets.