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Coinbase Earnings Due As Bitcoin Pulls Back On Infrastructure Vote

Cryptocurrency exchange Coinbase (COIN) reports second-quarter earnings after the close today. Coinbase stock fell ahead of the results, along with other Bitcoin stocks, as the cryptocurrency retreated from multi-month highs.




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The company reports results as investors weigh the prospect of new cryptocurrency regulations and industry crackdowns against signs of more mainstream support. The just-passed Senate infrastructure deal includes new regulations and fees regarding cryptocurrency transactions.

Coinbase Earnings

Estimates: Wall Street expects Coinbase earnings to come in at $2.32 per share on revenue of $1.821 billion.

Results: Coinbase earnings due after the close.

Coinbase Stock

Coinbase stock fell 3.8% in the stock market today. Shares have largely fallen since their debut in April, when the price of Bitcoin was near record highs. COIN stock surged 22% over the prior three sessions, rebounding from its 50-day line.

Coinbase stock has a 66 Composite Rating. Its EPS Rating is 71.

Coinbase, like other Bitcoin stocks, tends to rise and fall with the underlying cryptocurrency.

The price of Bitcoin slipped 1.9% vs. 24 hours earlier to $45,050. Bitcoin topped $46,400 on Monday, the highest since mid-May. That comes after the Bitcoin price tumbled below $30,000 in late July.

Among other Bitcoin stocks, Marathon Digital Holdings (MARA) fell 1.6%. MicroStrategy (MSTR) lost 2.8%. The Grayscale Bitcoin Trust (GBTC) was down 2.5%.

Coinbase’s fortunes are largely tied to the public’s interest in cryptocurrencies, drawing revenue from transaction fees earned from cryptocurrency trades on its platform. The exchange had more than 56 million verified users on its platform as of March 31.

The company, which competes with other exchanges, in June said it would allow some trading of the meme-based cryptocurrency Dogecoin. Coinbase’s first-quarter results, reported in May, came up shy of estimates.

NFTs, Infrastructure

In a list of questions from shareholders for the company ahead of its results, the most shared question was about whether Coinbase has “any plans to add NFTs?” or non-fungible tokens. Those tokens use crypto technology to render things like art as verifiable pieces of property that can be sold as digital goods.

Another widely-shared question sought more information on how Coinbase’s Prime service, geared toward more sophisticated and institutional investors, was different from other service providers.

Bitcoin stocks also face broader challenges. Cryptocurrency industry groups expressed dismay at the Senate’s decision not to rework an item in the $1 trillion bipartisan infrastructure bill that was intended to strengthen transaction-data reporting requirements and tax enforcement on the industry. The tighter rules would raise an estimated $28 billion over the next decade to fund the bill.

The Senate passed the bill on Tuesday. The bill — and crypto lobbyists’ attention — now go to the House.

‘Harmful’ Requirements

At issue has been how the bill defines the cryptocurrency-transaction “brokers” that would be subject to the reporting requirements. The crypto industry worried that the language in the bill was too broad, and would end up applying to people like miners and others that don’t directly handle crypto transactions and are unable to collect user information.

“As written, the infrastructure bill contains harmful IRS reporting requirements that many in the crypto ecosystem lack the capabilities to comply with,” Kristin Smith, executive director of the Blockchain Association, an industry advocacy group, said in a statement Monday. “As a result, many crypto players will be forced to move overseas, leaving future jobs and economic growth on the table.”

Elsewhere, the price of Bitcoin and Bitcoin stocks have been under pressure amid a crackdown in China on cryptocurrency-related activity.

However, at a recent panel, Tesla (TSLA) CEO Elon Musk said that “on balance, I support Bitcoin.” Ark Invest CEO Cathie Wood has also thrown her support behind the digital asset.

Follow Bill Peters on Twitter at @IBD_BPeters.

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