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Author Message   Entrepreneur Kurra Bewarse Username: Entrepreneur Post Number: 3846 Registered: 05-2011 Rating: N/A Votes: 0 Posted on Tuesday, December 28, 2021 - 6:44 pm:    Coinbase Global struggling to get back to November highs as Bitcoin's slump continues (261.63 -18.63) Coinbase Global (COIN -6%) has come under intense selling pressure today as Bitcoin prices reversed course from yesterday's solid jump. With COIN deriving nearly all its revenue from the buying and selling of cryptocurrency on its exchange platform, the stock tends to mirror the broader crypto market, which continues to be incredibly volatile. However, this volatility acts in COIN's favor as it boosts the number of Monthly Transacting Users (MTUs). When prices remain stable, trading volumes tend to be fairly muted. This is primarily why the company missed on Q3 earnings and revenue. Nonetheless, COIN benefits much more from a surging crypto market than a lagging one, as more MTUs will flock to its platform when prices keep going up. Also, during COIN's Q3 earnings call in early November, because the crypto market was currently hot, the company bumped up its FY21 outlook. COIN forecasted its FY21 MTUs to range from 8-8.5 mln. COIN also noted that Q4 was off to a strong start, with volatility and prices both up in October. As a result, the company predicted that Q4 MTUs will be higher than in Q3. Therefore, with Bitcoin struggling to recover from a massive dip earlier in the month that wiped out about 20% of its value, COIN is similarly seeing significant selling pressure today. However, COIN has also made strides in diversifying its revenue stream. For example, in Q3, the company posted a 41% jump sequentially in its subscription and services revenue. COIN also pointed out that 28% of its retail MTUs also engaged with a second product on the platform, such as Staking, Earn, Borrow, and Lend. COIN also noted that these products and services are just the beginning, and it plans to launch more in the coming quarters in a further effort to reduce its dependence on crypto markets. Overall, with COIN not reporting Q4 earnings until possibly March, there is still plenty of time for the crypto market to see a solid recovery. However, in the short-term, the sell-off happening in the crypto space may continue to keep a lid on COIN from getting back to all-time highs from early November.