Coinbase: In contrast to Bitcoin, there are two sides with volatile volumes

The coinbase fortunes are as volatile as the cryptocurrencies with which customers act on its platform. The results of the third quarter were worse than expected after the hiring zeal unexpectedly declined. The stock fell by up to 10 percent on Wednesday before it made up part of the lost ground.

The group has developed into one of the most important trading places in the USA for the purchase and sale of digital tokens such as Bitcoin and Ethereum. It makes the majority of its income from fees that are charged every time when cryptocurrencies virtually change the owner.

This business model has made the shares of Coinbase attractive for crypto-newly regulated investors who are prevented from trying to try directly on the tokens. The group was brought to the stock exchange in April and now has a market value of $ 71.5 billion.

The trading volume broke in almost a third to $ 327 billion in the last quarter compared to the same period last year. The number of "monthly transaction users" - which act at least once a month - was 7.4 million compared to 8.8 million earlier.

Coinbase remains highly profitable. It generated a net profit of $ 406 million with sales of $ 1.31 billion. But that does not justify his high rating. The share will be traded 49 times the future profits compared to 29 times for the NASDAQ and 25 times for the Intercontinental Exchange. His assessment is very fast growth. In view of the unpredictability of the demand for cryptos, this is anything but guaranteed.

The company promised better figures for the fourth quarter thanks to the rally at Bitcoin and other digital assets. Coinbase spoke about his plans to open a marketplace for non -fungible tokens (NFTS) to benefit from the boom in digital collector's pieces.

Coinbase pursues a strategy depending on the point of view, which is based on the unstoppable dynamics of the crypto revolution or chasing fashion.

According to Coinmarketcap.com, no less than 7,248 cryptocurrencies are currently being traded. This points more to the relatively low costs for the creation of token than to their growing benefits.

A less splitting observation is that the competition has increased last year. Robinhood, PayPal and Squarenow offer crypto trading. There are also services from competing stock exchanges such as Binance, Gemini, Bitstamp and Kraken.

Investors can also invest in Bitcoin via dedicated ETFs. Depot banks strive to provide crypto services for institutional customers.

All of these factors will burden the fees that Coinbase can collect. Like Bitcoin, his business is a crowded trade.