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Despite its recent rise in share price, Coinbase is allegedly slated to underperform in 2023 according to a new report released by Bank of America. The financial conglomerate said shares of the company – which are currently trading around $50 a pop – could fall as low as $35 in the coming weeks.
Coinbase Keeps Pushing the Barricades
Strategists write in their report:
With crypto’s prospects for 2023 dismal (as evidenced by the second round of COIN layoffs announced yesterday), we’re lowering our 2023 revenue estimates for COIN further below the Street… This lower volume forecast prompts a five percent/three percent reduction in ‘ 23 transaction revs/total net revs to $1,264M/$2,253M, which is now 32 percent/24 percent below the Street.
Coinbase just can’t seem to catch a break. The company announced a few days ago that it would be laying off nearly 1,000 people. The national crypto exchange said the ongoing volatility and speculation over the course of 2022 was too much to handle, and with currencies everywhere falling like they had never before, there was no choice but to relieve additional employees of their duties and send them packing.
CEO Brian Armstrong commented that the layoffs are part of a grand plan to reduce operating costs by a quarter in the coming months.
Additionally, the brother of a former Coinbase manager has been sentenced to ten months in prison for allegedly being involved in an insider trading scheme, arguably the first of its kind in the crypto space. While no current employees of the company have been charged or arrested at the time of writing, one can imagine that the mere mention of the company’s name in such news does not look good on an already ailing company.
Nikhil Wahi first made headlines a few months ago when it was announced that he was involved in trading based on classified data originating from Coinbase. Wahi would find out which coins to list on reputed exchanges, then buy units of the asset along with various associates (namely, his brother Ishan and a friend named Sameer Ramani) knowing that the coins would see an increase in price. They would then sell the units at a profit.
Currently, Ishan is scheduled to be tried after pleading not guilty, while Ramani is a fugitive. Damian Williams – the top federal prosecutor in Manhattan who oversaw the Nikhil case – said in a statement:
Today’s sentence makes it clear that the cryptocurrency market is not lawless.
Expressing Apologies
During the trial, Nikhil shows remorse for his actions, claiming he did what he did as a way to help his struggling parents. He mentioned:
I wanted to help my parents, but instead I made them suffer a lot. I am very sorry for what I did.
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