Shares of Coinbase (NASDAQ:COIN) have not had an easy run and it’s not getting any easier on Thursday. The company is now investigating an issue of several networks that are causing delayed deposits and withdrawals, news of which has COIN stock down about 5% on the day.
Yesterday, the company said it cleared up delay issues “in processing ETH/ERC-20 deposits on Coinbase.com and Coinbase Pro.” Today it’s having a separate issue with another outage without providing many details.
Of course, it’s not a very good day to be having issues. Not only are Bitcoin (BTC-USD) prices lower, but the overall market is getting hit too.
Overall, Coinbase has been struggling. Shares are down about 75% so far this year and suffered a peak-to-trough decline of 90.5%. While COIN stock had surged off its 2022 low — almost tripling at one point — it has now fallen almost 50% in the last four weeks.
What’s Next for COIN Stock?
On Aug. 9, the company reported its second-quarter earnings. Coinbase missed revenue and earnings expectations, as sales sank more than 60% year-over-year. COIN stock has been under pressure since, falling in 13 of the last 18 sessions.
However, Coinbase got some good news a few weeks ago, according to JPMorgan analyst Kenneth Worthington. He sees Coinbase as a “meaningful beneficiary” to the Ethereum Merge.
Worthington noted that Coinbase is America’s largest cryptocurrency exchange as measured by daily trading volume. He believes that the company is positioned for a larger revenue opportunity because of its outsized exposure to Ethereum (ETH-USD). Specifically, Coinbase has “a larger market share of ether assets (15%) than the 7% share it has of the overall crypto ecosystem.”
Further, he estimates that “incremental annual staking revenue from the ether merge to be $650M assuming an ETH price of $2K and a 5% ETH yield.”
This is a positive, of course, but does it matter?
At the moment, it seems likely for investors to focus on the bear market in equities, the price action and earnings from Coinbase, and the trend in cryptocurrencies. While Worthington’s argument may hold water, the trend at the moment is a concern.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.