“Dangerous Road” Ahead for Crypto Investors – The Irish Times

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There is an obvious downside to new Coinbase Ireland boss Cormac Dinan’s optimism about the company and the industry in general.

The former director of Deloitte Ireland told the Irish Times this week that Dublin was on a shortlist of locations likely to become the crypto exchange’s new MiCA (Markets in Crypto Assets) center once the vast framework digital asset legal framework will have been approved by the EU later this year. This could, at least in Dinan’s estimation, lead to an “increase” in Coinbase’s Irish workforce somewhere down the line.

“Essentially,” Dinan said, “we will have more to do from a regulatory point of view. So yes, I see a bit of improvement in terms of jobs above what we have today and I think we’ll probably find out within the next two months.

The problem is that even “a few months” is a long time in crypto at the moment. It must be said that Coinbase seems to be in a better position than many other big players in the sector to weather the storm that has rocked the digital markets over the past 12 months. It had $5 billion in cash and cash equivalents at the end of the third quarter of last year, according to its results for that period.

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Importantly, these results predate FTX’s collapse last November and the arrest of its founder, Sam Bankman-Fried, on fraud charges, a pivotal moment that sent shockwaves throughout the industry. It has also sent many smaller retail investors running for cover, a problem for Coinbase, which derives some of its revenue from fees charged to customers who use the platform to trade coins.

On Tuesday, when Coinbase releases its fourth quarter and full year 2022 results, we can assess the damage. But despite Coinbase shares surging so far this year in line with a broader recovery in the sector, analysts at a US investment bank this week downgraded their outlook for the stock. , citing the “increasingly treacherous” short-term trajectory for The Sector.

The message is that any optimism regarding the sector should be taken with a large pinch of salt at this time. This is especially the case, given the tune U.S. regulators are humming about crypto right now.

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