Coinbase Faces Pivotal 2023 as Core Business Declines, SEC Lawsuit Looms, and Offshore Exchange Represents Wild Card
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Coinbase's core exchange trading business is becoming a low-margin commodity service as competition increases. Its side bets like stablecoins and staking aren't delivering either.
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Custody services from new Bitcoin ETFs could provide a boost but may also eat into Coinbase's trading revenue. The gains seem small compared to its current revenues.
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The SEC lawsuit poses an existential threat if Coinbase loses, potentially causing a stock crash and acquisition.
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A bright scenario sees Coinbase beating the SEC and its offshore derivatives exchange taking off to compete with fallen giants like FTX.
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2023 is likely to be an inflection point for Coinbase, with its trajectory changing dramatically for better or worse.