Cathie Wood’s ARK Doubles Down on Coinbase as Crypto Exchange Announces Layoffs<a href="" target="_blank" rel="noopener">Source</a>

Coinbase moreover had some restructuring News yesterday I really feel our subsequent customer Has additional on that Yes so that you already as we merely type of said Coinbase is chopping spherical 20 of its Workforce they'd already decrease spherical 18 Now this new decrease portions to spherical uh 950 staff so turning into a member of us now to interrupt This down is senior at Oppenheimer Owen Lau welcome Owen Um so yeah let's talk about coinbase so Owen um merely to kind of get correct into It you already know we checked out a couple of of your Notes and in addition you appeared comparatively Optimistic about this I indicate you already know With emphasis on the phrase comparatively This is clearly harmful nonetheless um you seem Relatively optimistic about what this Means for for coinbase and will you merely Break down why like why is that this not as Bad as a result of it seems to be like Yeah so I really feel to start with we have Many many headlines daily Already so we have now to discuss some Positives which can be like extraordinarily Undercover to me comparatively speaking I Mean to start with I understand that we Are nonetheless in crypto winter catastrophe of Confidence and points like that points Will be tough throughout the near time interval nonetheless If you check out once check out bigger Picture uh FTX is so from a Competitive standpoint coinbase does not Have many genuine rivals longer

Term so for those who occur to run the numbers check out The shopping for and promoting amount for those who occur to don't cross Certain shopping for and promoting amount you're not Profitable so that's why I felt like Longer time interval if many companies or if some Companies go under coinbase might very effectively be one Of the survivors on this space Interesting correctly yeah it's fascinating I Guess the aim about FTX I indicate Coinbase is such a take into consideration such a U.S Exchange and FTX was not so I don't Think of us usually take into account them as Competitors nonetheless merely to get into what You merely said though about coinbase Being able to outlive you already know one among The criticisms of coinbase has been that Most of their um revenues come from Transaction are like practically all of It correct and so that implies that when There's merely not a great deal of transactions Or whenever you already know there's a market stoop They're not very correctly prepared for it I Mean do you see proof that they are Really diversifying their enterprise model Because they've carried out like little points Here and there you already know they went into Nfts didn't truly go that correctly I indicate Are they actually diversifying adequate to Prepare themselves for if there's an Extended streak the place there's merely not a Lot of crypto commerce I really feel which may be a unbelievable question I Think that is no doubt one of many good Misperception about coinbase once more in

2020 for those who occur to try the numbers 2q 2020 Subscription Revenue contribute about Four % of coinbase full revenue In the third quarter it went as a lot as 36 in Fourth quarter we estimate that it will Go as a lot as 40 and 2023 I really feel it will Exit What do you indicate by subscription Revenue What exactly what's that exactly what Is subscription Revenue Right subscription revenues comprise of Interest income uh which is tied to Their partnership share Revenue sharing Agreement with circle of the regular They have the staking Revenue they've The custody Revenue so these revenues Are not exactly tied to transaction so So that's why for those who occur to do the maths like This so that they develop be under so-called Subscription and firms Revenue which Is outdoor of the shopping for and promoting Revenue so I Think there's nonetheless like as soon as extra I really feel There's a misunderstanding in 2023 it'll presumably Go as a lot as 50 % of coinbase full Revenue when the FED elevating Interest worth the revenue share with Circle relating to curiosity income will Go up so that's why for those who occur to cowl the Name of the stock you merely for those who occur to easily Look on the uh the income assertion you Don't perceive that's coinbase Financials you'd suppose that's one Of the vendor corporations in the marketplace so I really feel This is a misunderstanding that I really feel you

Know I I truly want to clarify I I I've to ask on account of your estimates Of ebitdov for this coming 12 months acceptable Me if I'm improper is close to a billion Dollars throughout the purple acceptable in several Words and that's double uh the the loss That it it most actually suffered by your Estimates in . Um coupled with that the curiosity income While that is positive and a rising worth Environment that's good for banks That's good for financial institutions But if there is a lack of Interest so to Speak an absence of of Um demand from the from the retail Market and from the institutional market For crypto belongings doesn't that affect Ultimately the the revenues that it Would get from subscriptions and as well as You're a billion dollar hole As as your particular person notes current and however you See the stock doubling in worth it's a Based on a various of what because you You you're having all these losses You're having all of these future you Know and even the problems that will Diversify its income aren't exactly set In stone they're they're not ensures They're based on a great deal of assumptions About the crypto markets which can not Happen so how are you doubling your your Your Target worth proper right here on on coinbase So to start with {{that a}} billion {{dollars}} At merely apital loss is sooner than they make

The 20 announcement so for those who occur to decrease 25 on That expense space then my our estimate Of it merely if it does ought to return down So by how loads we have to do the maths The regulation sorry so by how loads It's nonetheless a loss nonetheless we have to suppose About on this current setting it's Very highly effective to be worthwhile and for those who occur to Look on the soundness sheet and by the way during which If you check out many various companies and If you check out the shopping for and promoting amount for those who occur to Do the maths I don't suppose many various Companies are even worthwhile So why would it not not turns into I nonetheless how why would I then spend cash on Coinbase after I'll go to additional Profitable uh belongings why would I why Would I you perceive how I don't get the best way you Then double the when it's going Through these losses and in a enterprise That pretty frankly is struggling by What we're calling an ice age Right so I suppose for those who occur to try about Equation so the stock was down 80 Already so there are a whole lot of harmful have Been priced into the stock the stock is Trading at two events Revenue so so it's Like terribly like Rock Bottom Extremely so clearly there's a Reset it will go down extra nonetheless at two Times Revenue we see additional upside than Downside from proper right here so that's why we Found like from the width at merely the Same standpoint it's nonetheless an outstanding guess

And for those who consider what correct then Why not completely different crypto companies as soon as extra Um Or like correct exactly so Um bang of us rely on Rising expenses and Also worth throughout the these uh Rising Interest income already nonetheless for for Crypto companies like like like like Coinbase Um a great deal of the values have been pricing And there may very well be a like some good if the market turns I don't Think that has been priced into the Stock however Yeah I see that you've got an outperform Rating on a coin the price aim of About 72 {{dollars}} throughout the subsequent 12 to 18 Months the stock is up higher than 20 this Weekend Tech Kathy Wood of Arc has made her first purchase of The 12 months of coinbase stock together with practically 34 000 shares of coin to arcs ETF worth about one and a half million Dollars based on the January tenth Closing worth so do you merely see so that you simply Mentioned that we've reached Rock Bottom Now what are the catalysts to ship the Crypto market and coinbase once more up So I really feel the first catalyst is Still the fat so I'm not anticipating the Fat with lower charge of curiosity this 12 months I Think the the speed of curiosity would maintain Higher for longer nonetheless in some unspecified time sooner or later Maybe throughout the within the midst of this 12 months

The FED would stop elevating charge of curiosity So that will very effectively be adequate for the additional Risk on additional throughout the crypto belongings market And moreover the stock market so that will Be one Catalyst which is the and charge of curiosity and there Are some elementary catalysts as correctly Like you already know the Shanghai enhance in March this 12 months and as well as the Bitcoin Having in March 2024 so I do see some Catalysts from the macro standpoint and Also from a elementary standpoint that Can assist the digital belongings enterprise Longer time interval