Goldman Sachs Calls Coinbase a 'Tactical Trade,' Predicts Q2 Earnings Beat

The investment bank said in a client note that crypto price volatility could pay off for the exchange.

AccessTimeIconJul 12, 2021 at 9:22 p.m. UTC
Updated May 9, 2023 at 3:21 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Coinbase is in position to beat Wall Street's estimates for its second-quarter financial results, according to a new Goldman Sachs memo that labels the crypto exchange a "top 25 tactical trade."

Citing Goldman's "buy" rating for COIN, researchers on the investment bank’s derivatives team said in the note to clients that the recent parade of negative crypto headlines could paradoxically help lead to an earnings beat.

  • Arca CIO on Crypto Outlook After FTX Collapse
    07:45
    Arca CIO on Crypto Outlook After FTX Collapse
  • eToro Consultant Talks Crypto Correlation With Nasdaq Ahead of Historically Bearish September
    02:33
    eToro Consultant Talks Crypto Correlation With Nasdaq Ahead of Historically Bearish September
  • Bitcoin Falls Below $30K as Bullish Momentum Wanes
    11:33
    Bitcoin Falls Below $30K as Bullish Momentum Wanes
  • FTX US Debuts Stock Trading in Push for Bigger Slice of US Retail Pie
    04:57
    FTX US Debuts Stock Trading in Push for Bigger Slice of US Retail Pie
  • That’s because “significantly elevated crypto asset volatility” led to a boom in trading volume that Coinbase can profit from through fees, the note said. The new report pointed to a July 8 note by Goldman's Will Nance, which said that even if bitcoin's price stays low, skittish users paying high fees to trade is a lucrative position for the exchange. 

    In his note, Nance said that investors turned off by COIN’s post-listing slump – shares are down more than 25% from their peak – could start “reengaging in the coming quarters.” Coinbase listed its shares on Nasdaq in April.

    Goldman acknowledged its earnings-per-share estimate for Coinbase is “11% above consensus” for the year ahead. The firm was a financial adviser to Coinbase's public listing in April.

    Coinbase was trading down 2.5% Monday afternoon at $248 per share.

    Correction (July 16, 14:21 UTC): Coinbase's second-quarter earnings call was not on July 15; the date has not been announced yet.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.