Coinbase (NASDAQ:COIN), the US-based cryptocurrency exchange giant, continues to navigate the complex world of digital currencies amidst regulatory uncertainties and market fluctuations. The company's CEO, Brian Armstrong, recently expressed his surprise at Bitcoin's resilience, with the cryptocurrency trading above the $20,000 mark as of Thursday, September 28.
In a CNBC interview on the same day, Armstrong highlighted the lack of clear regulations on cryptocurrencies in the US, which he believes has led to many industry segments moving offshore. He contrasted this with the favorable stance of several G-20 countries towards cryptocurrencies. Countries such as Singapore, Hong Kong, the UK, Brazil, and Australia have embraced crypto as an integral part of their financial ecosystems.
Armstrong also touched upon the upcoming trial of Sam Bankman-Fried (SBF), comparing it to past negative incidents like the Mt. Gox issue. Despite these challenges, he emphasized that many founders are striving to develop the industry responsibly and trustworthily.
The ongoing SEC vs. Coinbase case remains a topic of significant interest. Armstrong expressed confidence about the outcome, citing three separate court rulings by different judges that criticized the SEC’s approach as ineffective and arbitrary.
As Coinbase navigates these challenges, it continues to expand its offerings. In 2021, Coinbase became the first major cryptocurrency exchange to go public on the Nasdaq stock exchange. This move brought further legitimacy and mainstream recognition to the world of cryptocurrencies. According to the InvestingPro data, Coinbase has an adjusted market cap of $17.83 billion, with a negative P/E ratio of -13.49, indicating the company is not currently profitable.
Coinbase has also launched its own network on Ethereum as a Layer 2 known as “BASE.” BASE is a Layer 2 scaling solution that employs Optimism's Optimistic Rollups to address scalability issues on Ethereum. It provides a secure, cost-effective and developer-friendly platform for building decentralized applications (DApps) which secure back to Ethereum's Layer 1 (L1) blockchain. The launch of BASE is part of Coinbase's efforts to make cryptocurrency and blockchain technology more accessible, user-friendly, and cost-effective, contributing to the growth of the cryptocurrency ecosystem.
However, it's worth noting some potential risks. According to InvestingPro Tips, Coinbase's stock generally trades with high price volatility and the company's earnings per share have been on a declining trend. Additionally, the company's stock price has fallen significantly over the last five years.
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