Equity Wall Street still doesn't get crypto
Nov 13, 2021
The discussion dives into the contrasting Q3 results of Coinbase and Robinhood, highlighting the stark differences in their crypto trading revenues. It reveals a trend of declining crypto trading across multiple companies, with Wall Street struggling to adapt. The speakers analyze the competitive landscape of exchanges, emphasizing Coinbase's stronghold despite high fees. Additionally, they explore the future of NFTs and the unique challenges that new crypto startups face in a volatile market, raising questions about long-term strategies and customer loyalty.
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Revenue Consistency Matters
- Revenue growth consistency is crucial for public companies because it sets market expectations.
- Crypto companies like Coinbase struggle with this due to the market's inherent volatility.
Coinbase's Growth Paradox
- Coinbase showed impressive year-over-year revenue growth but a decline compared to the previous quarter.
- This inconsistency caused the stock price to drop, highlighting investor focus on steady growth.
Coinbase's Revenue Model
- Coinbase's revenue is primarily from transaction fees, tied to trading volume of various cryptocurrencies.
- Adding more coins increases volatility and makes revenue prediction harder, impacting investor confidence.