Despite a 30% decline, Jim Cramer remains uninterested in investing in Coinbase, while BofA maintains its underperform rating on the stock. Key Point 2: Coinbase’s Q1 transaction volumes remain flat and app downloads decline, raising concerns for investors.
Jim Cramer’s Take on Coinbase Stock
Renowned investor and Mad Money host Jim Cramer has expressed his disinterest in investing in Coinbase Global Inc (NASDAQ: COIN), despite the stock’s recent 30% drop. He expressed disappointment over the cryptocurrency exchange’s inability to benefit from inflows during recent bank failures. Cramer commented on CNBC’s “Squawk Box”:
I figured that, not to me, but to some people they were the JPMorgan of the business. So, the money goes to JPMorgan. Doesn’t look like it. I wouldn’t touch this thing at all.
It is important to note that Coinbase stock is still up 90+% year-to-date.
Bank of America’s Bearish Outlook on Coinbase
On Thursday, a Bank of America analyst cited CoinGecko data, indicating that Coinbase’s transaction volumes remained flat in Q1, falling short of consensus by $24 billion. This is significant, as transaction volume accounts for a large portion of Coinbase’s total revenue.
Additionally, the analyst, Jason Kupferberg, referred to Sensor Tower data revealing a 6.0% decline in app downloads, resulting in the lowest number of downloads since Q3 2020, at 2.7 million. Kupferberg reiterated his “underperform” rating on Coinbase stock, stating:
While we don’t see much risk to Coin’s 1Q interest income, USDC’s market cap has fallen 24% since the bank crisis started, which could add risk to interest income estimates over the next few quarters.
Conclusion
Both Jim Cramer and Bank of America’s analyst express skepticism about investing in Coinbase stock, citing concerns about transaction volumes and app downloads. As the stock’s performance continues to fluctuate, investors must weigh the potential risks and rewards of investing in the cryptocurrency exchange.
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