Coinbase Is Down More Than 60% Over the Past 12 Months. Here's Why I'm Bearish on COIN Stock.
The cryptocurrency exchange faces a lot of macro, competitive, and regulatory headwinds.
Overview
Coinbase's (NASDAQ: COIN) stock has declined more than 60% over the past 12 months. The major cryptocurrency exchange lost its luster as fears of interest rate hikes and other macro headwinds chilled the crypto market. That pullback might seem like a buying opportunity for contrarian investors, but I expect its stock to sink even lower before it's considered a bargain.
Coinbase generates most of its revenue by charging transaction fees for spot crypto trades. When interest rates are low, cryptocurrencies often rally as investors pivot toward riskier investments. The opposite happens when interest rates rise, and the crypto market cools off.
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Originally published at www.fool.com.