Short-seller Jim Chanos is bearish on Coinbase, whose revenue has plummeted this year due to declining interest in crypto market
During a recent podcast appearance, famed short-seller Jim Chanos stated that he believes that the stock of cryptocurrency exchanges will be under extreme pressure due to declining fee revenue.
Chanos is most famous for predicting the bankruptcy of energy giant Enron in the early 2000s. The $74 billion Wall Street darling perpetuated large-scale accounting fraud. The scandal led to the imprisonment of CEO Jeffrey Skilling and other high-profile executives.
The investor bet big on the collapse of Enron in 2001 and kept increasing his stake throughout the year until the company eventually went belly-up.
Chanos has also made bets against the now-insolvent German payment processor Wirecard and American car rental company Hertz.
Earlier this May, the largest cryptocurrency exchange clarified that its users could theoretically lose their crypto holdings if the company were to go broke.
However, CEO Brian Armstrong has clarified that the company was nowhere close to facing bankruptcy, to assuage users’ concerns.
The billionaire executive also downplayed the growing bearishness during the company’s Q1 earnings call, claiming that he is more bullish than ever on the exchange’s future.
Earlier this month, the company reportedly paused hiring due to the painful market correction.
Armstrong said that he could see fee compression in the long term amid growing competition.
Fees remain Coinbase’s bread and butter. The exchange is also focused on developing new revenue streams such as staking and custody business. Coinbase also has its own debit card.
Source: https://u.today/investor-who-shorted-enron-early-is-betting-against-coinbase