Mizuho analyst Dan Dolev downgraded Coinbase Global ( NASDAQ: COIN ) stock to Underperform from Neutral on Friday, questioning whether the cryptocurrency exchange's interest income, a key revenue driver, is "the next shoe to drop." COIN shares slid 3.3% in premarket trading. The company's interest income, which accounted for 10%-15% of its Q3 revenue, from stablecoin issuer Circle's USD Coin ( USDC-USD ) has been increasingly vital for Coinbase ( COIN ) this year in the wake of bearish crypto sentiment and deteriorating trading volume, Dolev pointed out in a note. For Q3, Coinbase ( COIN ) saw its interest income surge to $101.78M from $8.39M a year before, boosting its subscription and services revenue. Circle's payout to Coinbase climbed to $22M in Q2 from just $4M in Q1, the analyst noted. In the eyes of Dolev, though, "consensus estimates for interest income for COIN suggests that the Street is underestimating the potential risks" regarding any potential change to Coinbase's ( COIN ) USDC income from Circle, he wrote. The Street sees Coinbase's ( COIN ) interest income hitting ~$685M in 2024, according to the note. However, when assuming just 25% chance of re-negotiation in the existing Circle-COIN contract at "25% of the economics that COIN is likely currently earning implies a ~$125mn drag on COIN's share of interest income." Earlier this week, (Dec. 8) Coinbase expects revenue to fall at least 50% from 2021 .
What Is Better ? Hardware Mining or Software Mining? Pros & Cons Fully Explained!
Top 5 Crypto Exchanges 2022: Best Crypto Exchanges to Work With!
Dogecoin: What is Dogecoin? EXPLAINED!
Donate BTC
Our Partners
Get Crypto Newsletter
Our monthly newsletter contains news, updates and
exclusive bonus opportunities. You may unsubscribe at any time.
Donate BTC
This website uses cookies
By choosing "Accept all cookies" you agree to the use of cookies to help us provide you with a better user experience and to analyse website usage. Only the essential cookies are necessary for the proper functioning of our website and cannot be refused
Cookie settings
Our website stores four types of cookies. At any time you can choose which cookies you accept and which you refuse. You can read more about what cookies are and what types of cookies we store in our Cookie Policy.
are necessary for technical reasons. Without them, this website may not function properly.
are necessary for specific functionality on the website. Without them, some features may be disabled.
allow us to analyse website use and to improve the visitor's experience.
allow us to personalise your experience and to send you relevant content and offers, on this website and other websites.