Crypto Trading, Website Traffic, Income and More

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On Tuesday, after the market closes, Coinbase (COIN) will release financial data for the third quarter. Recall that in the second quarter, the main crypto exchange delivered meteoric beats across the board, which coincided with bitcoin’s skyrocketing to new highs in May.

Coinbase’s fortunes are closely tied to the performance of BTC, and after bitcoin’s sharp decline from mid-May through the third quarter to its low in late July, it would be prudent to expect a more negative performance in the month. during the quarter, said Ken Worthington of JP Morgan.

“The volume of cryptocurrency trading slowed significantly in 3Q21,” the analyst said. “We estimate volumes were probably down around 40% from 2Q21, levels largely based on the strength of 2Q volumes but driven lower by particularly weak trading activity in July.”

Worthington’s view is confirmed by Coinbase’s third quarter website traffic. Between Q2 and Q3 unique visitors (UV) fell 37% and, as the analyst noted, July represented the low with UV increasing.

It’s also worth noting that while UV has decreased sequentially, it is still significantly higher than in the same time period last year – by 132%, in this case.

Compared to their peers, industry data actually shows that Coinbase’s volumes were better than those reported by the rest of the industry; these were down around 38% compared to Coinbase’s 25% drop in the quarter, although this could be due to a slight increase in COIN’s new Institutional Prime business which generates less revenue. As such, Worthington models a 30% drop in retail volume.

The outlook for the fourth quarter should show some quarterly improvement, which unsurprisingly coincided with the recent boom in bitcoin and crypto to new highs. Not to mention, the October approval of 3 bitcoin ETFs and Coinbase’s announcement of its upcoming entry into the NFT space further helped boost sentiment. The data supports this notion. According to Apptopia, transaction volume and app download data looked “much better” in October, posting a 70% increase from third quarter levels.

To that end, the JP Morgan analyst rates COIN stocks with an overweight (i.e. buy) as well as a price target of $ 375. The implication for investors? 5% increase from current levels. It will be interesting to see if the Worthington Target gets a facelift when the company reports results tomorrow. (To see Worthington’s record, click here)

Looking at the consensus split, based on 12 buys vs. 3 takes and 2 sells, COIN stock has a moderate buy consensus rating. (See the analysis of Coinbase shares on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the analyst presented. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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