A recent Jefferies report said that cryptocurrency exchange Coinbase remains strong in the market because of its reasonable risk management and compliance policies, healthy balance of digital currencies, and the fact that it is a publicly registered and audited company. Analysts concluded that the Coinbase brand should be enough to keep the platform afloat after the decline of competitor FTX. As of today’s session, Coinbase shares were up 7 percent to $35.65 It is noted that the crypto industry is in increasingly difficult conditions: retail volumes have declined and asset prices have fallen.
Jefferies predicts that Coinbase will still suffer from this downturn, as their retail customer base is also declining. Nevertheless, they consider it a temporary phenomenon due to a strong balance sheet of more than $5 billion. Experts are confident in their management team for its active approach to compliance and risk management, which outperforms many competitors.
In conclusion, competition for Coinbase will decrease after the FTX fall, but net income is expected to fall significantly this year due to lower retail trading activity.
