YEREVAN (CoinChapter.com) – Coinbase, the largest crypto exchange in the US, prepares for another round of layoffs, letting go of 20% of its staff. Coinbase CEO Brian Armstrong asserted that while the decision was difficult, he could see no other way out.
Ben Armstrong says the layoffs were a necessary measure
It became clear that we would need to reduce expenses to increase our chances of doing well in every scenario. There was no way to reduce our expenses significantly enough without considering changes to headcount.
commented Armstrong.
Moreover, Coinbase officials asserted that the move would result in new expenses in Q1, between $149 million and $163 million. Combined with other restructuring measures, the layoffs will bring Coinbase’s operating expenses down by 25% by March, according to a new regulatory filing.
The crypto company also said it expects adjusted EBITDA losses for the full year to be within a prior $500 million “guardrail” set last year. Armstrong also commented on the infamous FTX collapse and how it created a “black eye” for the industry.
We may not have seen the last of it. There will be increased scrutiny on various companies in the space to make sure that they’re following the rules. Long term, that’s a good thing. But short term, there’s still a lot of market fear.
Said the CEO.
Also read: FTX exec Nishad Singh to sign a plea agreement with the Feds – will he evade jail sentence?
Will COIN stock conquer the $40 threshold?
Coinbase layoffs are not an isolated incident. The entire IT sector took a hit in the wake of the economic crisis and the looming recession, restructuring the staff and rethinking potential hiring schedules. Additionally, as the stock market slid over 20%, Coinbase’s stock (NASDAQ: COIN) followed the bearish path. COIN traded at $40 per share after peaking at $368 in Nov 2021.
However, it is too soon to ring bullish bells for COIN, as the stock has not yet closed the session above the said threshold. Furthermore, the long-haul predictions are still bearish, given the headwinds from the Fed policies.
In detail, the stock bottomed out on Jan 7, hitting an all-time low of $31. The price has corrected upward since. However, as mentioned, the recession and the crypto winter threaten new lows for COIN.
What’s in store for Coinbase stock?
As CoinChapter reported in the previous review, Coinbase gets revenue from transactions. So, in theory, the platform shouldn’t depend on crypto prices as long as people trade them. However, the reality does not support the claim. The charts clearly show COIN’s correlation with Bitcoin, and the stock could drop lower in the current quarter as recession fears intensify, despite BTC’s relief rally.
Also read: Coinbase(COIN) Stock Jumps On Google Deal to Accept Crypto Payment.
Meanwhile, the charts above demonstrate increased trading volumes in the previous three days. Will investors double down enough to ensure a convincing rally above $40 for COIN? Unfortunately for Coinbase bulls, Bitcoin’s uptrend does not look confident enough to take Coinbase along for a strong bullish move. However, the upcoming sessions will shed more light on COIN’s possibilities.
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