Bitcoin and Crypto Price Crash Triggers Serious Coinbase Warning


After soaring to almost $70,000 last year in Bitcoin’s price, it has fallen to $40,000 this year as the crypto market cools.

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Although the bitcoin price has partially recovered from its lows at $35,000 per bitcoin last month, it has not rallied strongly amid concerns of increased regulation and the imminent end of pandemic-era stimulative measures.

Jim Chanos, a veteran fund manager, has warned against bitcoin and cryptocurrency exchange Coinbase – calling it a “bubble Stock.”

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Coinbase would be called one of the bubble stocks,” Chanos (the founder of Kynikos Associates) said in an interview to CNBC that he is now shorting Coinbase, meaning he is betting on the decline of Coinbase stock.

We believe that crypto competition will increase, although this isn’t a call on bitcoin prices or any other factors. However, we believe that fee compression will occur, and Coinbase, which has a market capitalization of $40 billion, won’t be profitable this year.

Coinbase, which was closely watched by Nasdaq in April 2013, has seen its value plummet by nearly half. Its price also fell sharply with the bitcoin price.

He was referring to Coinbase stock and its link to bitcoin prices. This is a bit of a cold water mark on the expectation that the exchange will be able diversify its earnings through expansion into the non-fungible token market (NFT), which has experienced huge growth in the past year.

John Todaro , Needham equity research analyst, said this week that Coinbase could earn an additional $1.2 million through the NFT market. Coinbase’s chief executive Brian Armstrong stated that the still-to-launch NFT-trading service has a waiting list with 1 million users. However, the NFT market was growing steadily.

There are many companies in the new economy with real growth, real cash flow, and real earnings. But there are also many that are being sold on stories. We would argue that Coinbase is one that’s being marketed on a story,” Chanos said.

Many bitcoin and crypto investors are optimistic despite the recent price crash.

Mikkel Morch (investment fund ARK36’s executive Director), stated in emailed remarks that “The $40,000 barrier remains an important psychological barrier” and that the reclaimed amount despite mounting geopolitical, macroeconomic and economic pressures shows bitcoin’s relative strength.

“The volatility isn’t particularly high when you consider the barrage of largely bad news stories that have dominated the news over recent days, including Covid cases increasing, and China’s Shenzhen Province being locked down. This will undoubtedly aggravate the supply chain problems.”

Morch predicts “institutional investors” will once again consider bitcoin as a safe-haven, store-of value type of asset. He stated that bitcoin would likely be one long-term beneficiary of a new monetary system with a weaker currency if we see these changes.

Jim Rogers, a legendary investor, warned that unprecedented sanctions against Russia’s banks and wealthy individuals, as well as the country’s central banking, could lead to “the end to the U.S. Dollar”. Forecasting countries will begin to “look for a rival” to the dollar, naming China and India, Iran and Brazil as those interested in decreasing their dollar dependence.



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