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Coinbase is the only publicly traded large digital-asset exchange. It went public in April of this year and has done quite well since then. However, the crypto exchange has recently made headlines after a number of its customers lost money as a result of a breach.
CNBC’s recent investigation found thousands of customer complaints against the company. The investigation report highlighted,
“Interviews with Coinbase customers around the country and a review of thousands of complaints reveal a pattern of account takeovers, where users see money suddenly vanish from their account, followed by poor customer service from Coinbase that made those users feel left hanging and angry.”
When the company went public, Coinbase CEO, Brian Armstrong asserted that there was no need to be scared of cryptos like before. However, money vanishing from user accounts definitely weaves a different tale.
Coinbase at no-loss, no-gain?
As a result of the negative press, its stock lost a significant amount of its value. For example, “COIN” has dropped by more than 20% in the last 12 days. However, when examined through a macro-lens, the parabolic recovery narrative remains valid. Indeed, the stock closed in the green on Friday and was seen steadily regaining its listing-day levels.
Notably, according to Coinbase’s most recent quarterly report, the exchange generated $2.23 billion in revenue. When compared to the earnings in the second quarter of previous year, this is a massive increase. Profits for the company increased by 4900 percent as compared to the modest $32 million achieved in Q2 2020.
In fact, other indicators also weaved an appealing tale for COIN. For instance, as per WSJ, Coinbase’s current stock price isn’t particularly cheap. In fact, COIN is trading 31 times more than its expected earnings and has a forward price-to-earning ratio of 26 for Nasdaq, and 23 for Intercontinental Exchange.
Is there something to worry about?
As far as the crypto facet is concerned, Coinbase has been able to maintain its third rank under the trust-worthy exchange category.Its trust score was also a perfect 10 on CoinGecko at the time of publication. The aforementioned rankings and scores are based on liquidity, trading activity, scale, technological expertise, and cybersecurity.
Furthermore, the exchange’s crypto trading volume had not seen a significant drop. In fact, Coinbase has accounted for 11% of total BTC/USD volume during the last 24 hours. So Coinbase has nothing to be concerned about. Furthermore, given the association that COIN has with Bitcoin, traders should anticipate a flurry of activity in the coming weeks.