German-American billionaire Peter Thiel might look at Goldman Sachs as a financial system’s dying relic. However, it seems like people don’t quite agree with him.
After Will Nance, an analyst at Goldman, changed the status of Robinhood’s stock from neutral to sell, the trading app’s shares dropped by 5% in intraday trading.
In addition, the Coinbase also slipped almost 2.5% after Nance forecasted that along with Robinhood, it would also be posting earnings well below anticipated Q1 projections.
Nance also noted the decrease in wider industry crypto trading volumes, in reference to Robinhood.
Initially, Robinhood started as a no-commission stock-trading app but then transitioned into digital assets. It lists seven different assets on the platform – Bitcoin SV, Litecoin, Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, and Dogecoin. On the other hand, Coinbase is entirely a crypto firm that lists 170 coins and tokens, as per the data from CoinMarketCap.
The cryptocurrency prices didn’t shine through in the first quarter of 2022 as compared to the previous which witnessed volatility in the prices with the price of flagship currency rising from below $30,000 at the start of the year to reaching its all-time high above $69,000 in November.
Meanwhile, the price movements were seen to be rather low-key in the first quarter of 2022, oscillating between $35,000 and $45,000.
With near-record profits, Coinbase released a record revenue of $2.5 billion for Q4. In addition, it also reported $547 billion in terms of the trading volume. Goldman forecasts that will drop to $302 billion for Q1.
On the other hand, Robinhood doesn’t have exciting Q4 results to show. The exchange’s $48 million in crypto revenue and $363 million in total revenue were up on a year-to-year basis, however lower than Q2 and Q3 figures. Further, Nance also notes that going forward, the company has a “limited path to near term profitability”
The trading platform was putting in efforts to increase traction for its crypto offerings. It declared on Thursday that users who are on the waitlist for its awaited crypto wallet can start leveraging the feature for transferring their holdings from the app.
Meanwhile, Robinhood disclosed its plans to integrate Lightning Network for Bitcoin transactions. Lightning facilitates cheaper and faster payments in BTC. Besides, it is also used in El Salvador for merchant transactions while Twitter uses it for its Tips feature.
Coinbase will be disclosing its Q1 earnings on May 11 while the earning report of Robinhood can come later this month.
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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/2022/04/09/after-goldman-analysts-prediction-of-low-q1-earnings-coinbase-and-robinhood-experience-drops/