COIN - Earnings May 10, Overvalued or Oversold?

Writing this very quickly and hoping to add this it along with input from others who are well versed in the crypto space.

Coinbase is having their earnings in the middle of a market where stocks are plummeting. At first I thought this was an easy short position, but upon quick review, it does not seem to be the case.


  • Still the most used crypto trading platform in the US.
  • Makes a shit ton of money, made $3B in operating income last year. Great financials and strong balance sheet
  • Low valuation, trading at a PE about 7. Compare this with SPY which is still trading at a PE of 20+. For a profitable tech stock, this is criminally underrated.


  • Arguably bear market for entire stock market
  • Crypto has been ravaged alongside stocks, suffering larger losses given the nature of the the asset.
  • 2021 was a gangbusters year for crypto. At the rate 2022 is going, you may see crypto trades dry up and coinbase’s (along with everyone else) may actually see a flat year or even a contraction as investors no longer trade a “risky” asset.
  • No real moat, plenty of competition have sprung up and a race to the bottom is coming for market share. Coinbase dominated 2021, but may need to shave their profit margin if they want to continue being the dominant player in the market
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I’d really like those more familiar with crypto to chime in as well. Positive cash flow and being the market leader would be bullish in any other market except this one IMO. Although it doesn’t dip as low as BTC, the COIN chart follows the BTC pattern pretty closely and BTC is in a heavy downward trend.

I think Swole said it best that crypto would be the first market to experience outflows of liquidity as it’s the most risk-inclined market and the sentiment for risk has changed.

Let’s say they do report above top and bottom line earnings. Would this be enough? Because as you stated, something completely unexpected would have to be presented for guidance to be positive going into the next quarter. Maybe a share buyback but that’s complete speculation. I think trying to find a bullish play on COIN is fighting the trend at this moment and the trend is strong.

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Down 16%, this article points to some bearish news.

I think this can be summed up as, 2021 was a great year for Coinbase, but stormy weather ahead. 2022 may see their income severely cut, so while their financials look great for 2021, 2022 may see a complete 180 and this stock may be overpriced.

Well holy shit, I had some bull spreads that never got filled thankfully. It should be noted that if you are holding crypto, this is not a good sign. The market is anticipating large pullbacks based on coinbase’s price movement