The downfall of FTX in the crypto market is having side effects on US-based crypto exchange Coinbase. Bank of America has stated that it will downgrade Coinbase from “buy to neutral.” In the last 24 hours, the price of the Coinbase was reduced by 7%; currently, it is trading at $45 (USD). Goldman maintained its sell rating on Coinbase and reduced its year end price forecast to $41 (USD) from $49 (USD).
In a recent press conference Bank of America stated that it is important to separate speculative crypto trading and token prices from the underlying blockchain technology.
Jason Kupferberg stated that “We think Coinbase likely faces a number of new headwinds over the mid-term due to the recent collapse of rival crypto exchange FTX.” “As a result, we downgrade Coinbase to neutral from buy and reduce our estimates.”
On November 8, Coinbase CEO Brain Armstrong assured their platform users that Coinbase is a regulated institution and that the entity holds users’ funds as one-to-one, making a situation like FTX impossible. Brain stated that he was upset with the recent third quarter earnings report.
He thought it was necessary to provide clarity about how Coinbase crypto assets are different from others. The new approach is to maintain transparency, risk management, and consumer protection.
“Coinbase is a publicly traded company in the United States, and we have built our business in a way that allows us to be transparent about our track record, balance sheet strength and effectively and prudently manage risk for our customers and ourselves,” Brain stated.
Coinbase recently tweeted, “Trust Us” in this difficult situation currently facing cryptocurrencies.
The CFO of Coinbase, Alesia Hass, stated that “At Coinbase, we are different. And as we clearly disclose, we are holding customer assets one-for-one. So there can’t be a run on the bank at Coinbase.”
Coinbase intends to expand its global market into European nations. Recently, it got permission from the Netherlands and Italy to start their crypto businesses. Brian Armstrong, recently attended the Singapore Fintech Festival (SFF) 2022 event. On this occasion, he stated that regulation can protect retail users of the crypto assets while enabling Web3 innovations.
What Sets Coinbase Apart From Other Crypto Exchanges
- At Coinbase, there is no “run on the bank.”
- Holding a strong capital position of $5.6 billion (USD).
- Special team to maintain safety on the platform.
Coinbase stated that it will improve and develop the conditions that will help the entity’s growth in 2023. It is determined to overcome the economic conditions that pulled the entity backward in the 2022 reports.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/11/19/is-the-ftx-bankruptcy-going-to-affect-the-coinbase-price-in-the-crypto-market/