Exchange News- Some major investors have continued to pour money into the firm despite the problems.
- S&P issued a statement explaining the decision, citing weakened trading volumes.
Since Coinbase has recently been laying off a large number of employees. Investors’ faith in the company’s debt has taken a beating. The debt of the cryptocurrency exchange has been downgraded by one notch. From “BBB” to “BB-,” from “investment grade” to “speculative grade,” by S&P Global, one of the top credit rating companies.
To S&P, Microsoft and the United States Government are two of the safest borrowers among many. Deserving the highest possible rating of AAA. In cases of financial obligation default, such as when a bankruptcy petition has been submitted, lower-case letters like D are utilized.
Tough Year Ahead
S&P issued a statement explaining the decision, citing “weakened meaningfully” trading volumes at the exchange. And greater regulatory scrutiny in the wake of the high-profile collapse of FTX in November 2022.
Moreover, Coinbase’s profitability, despite recent efforts to cut operational expenditures and potential gains from higher interest rates, is expected to “remain pressured in 2023,” the firm stated. Coinbase revealed this week that it would lay off 950 workers and pay out severance payments totaling up to $163 million.
Furthermore, some major investors have continued to pour money into the firm despite the problems that have been plaguing it. Known institutional investor Cathie Wood’s tech-focused firm, Ark Invest, bought an additional 33,756 shares of COIN on Tuesday and another 74,792 shares on Wednesday. In all, the two acquisitions cost around $4.75 million.
Wood has placed several positive wagers on Coinbase, including twelve distinct purchases of COIN during the course of a single month.
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Source: https://thenewscrypto.com/credit-rating-firm-sp-global-lowers-coinbase-ratings-post-layoffs/