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A day after Coin Base revealed lower-than-expected results and provided an average revenue projection for the upcoming quarter, the company's shares were under pressure on Thursday. The most significant decline in the stock since May 2022, when it dropped 19.5%, was 15.3%. The coin base was also under pressure from a broader market decline.
Stocks linked to cryptocurrency also declined. Robin Hood fell 16% after releasing disappointing earnings on Wednesday. Riot Platforms and Mara Holdings, two miners, fell 11% and 8%, respectively. Bitcoin, which frequently significantly impacts the Coin base's price, fell 2.78% to $69,918.66 this week after staying below its record high of $73,000.
Devin Ryan JMP Securities
Devin Ryan, an analyst at JMP Securities, saw it as an opportunity for investors with a longer time horizon focused on Coin base and Robin Hood and chalked it up to a brief unwind in cryptocurrency-related names.
"There is a lot that's going to happen here over the next couple of months, like the US election and ramifications of that that will become the much bigger story for the space, not to mention the recent appreciation in crypto prices and volume could put upward pressure on fourth-quarter revenue if the trend continues over the next two months," Ryan, who has a Coin base outperform rating.
Coin Base Transaction
"Near-term, people will have to recalibrate a bit in their models for the blended take rate assumption," he said, referring to the portion of a transaction's revenue that the Coin base retains. "Nothing structural occurred here, but as stablecoin trading volume has increased, that comes at a lower spread, and the fourth-quarter implied revenue guide was a bit soft."
Oppenheimer analyst Owen Lau, who has a buy rating on Coin Base, linked Thursday's decline to the warning that muted traffic may continue and that declining US interest rates could slow Coin Base's stablecoin income growth.
Coin Base Market Conditions
Coin base further shows its confidence in its operations by announcing a share buyback program in connection with its most recent earnings results. According to the cryptocurrency exchange, its board of directors has approved a $1 billion share repurchase program. The state of the market will determine the timing and magnitude of any repurchases.
Coin Base Shareholders
In addition, the exchange company's leadership expressed hope about the future in a letter to shareholders, regardless of the outcome of the following US presidential election. The company claimed that presidential candidates and lawmakers from both parties have taken more pro-crypto positions, a significant change from the previous years.
In advance of the 2026 midterm elections, the business said on Wednesday that it has committed to giving an extra $25 million to the super political action committee Fair Shake to assist pro-crypto candidates.
