3 Reasons to Proceed With Caution When Considering Coinbase Stock
Shares of Coinbase Global (NASDAQ: COIN) are down more than 85% from their 52-week high and more than 80% year to date. But it looks like there is no rest for the weary as new challenges continue to emerge on the horizon for the crypto giant. Here are three looming threats that investors should take into account when considering a position in Coinbase.
As if plummeting crypto prices weren't enough to contend with, Coinbase is also grappling with intensifying competition and the threat of fee compression. Binance.US, the U.S. affiliate of the world's largest crypto exchange, Binance, has been ramping up in the U.S., rapidly increasing head count at a time when Coinbase has reduced it and raising money from external investors for the first time in a funding round that values the company at $4.5 billion. Binance.US plans to use this influx of capital to invest in improving its platform and to increase spending on marketing in the U.S., which could help it to take market share from Coinbase. Binance.US Chief Executive Officer Brian Shroder says that the company is on track for an initial public offering in the U.S. in the next several years, which would give it even more funding and visibility. Binance, which is privately held, says it has raised a large "war chest" and that it is targeting 50 to 100 deals to take over smaller platforms amid the current crypto bear market.
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Source Fool.com
