Acclaimed options trader and Lebanese-American author Nassim Nicholas Taleb has taken a swipe at Coinbase and has called the Nasdaq-quoted cryptocurrency exchange (COIN) “worthless.”
Black Swan Author Calls Coinbase Worthless
Despite showing love for cryptocurrency, Nassim Nicholas Taleb has been a major critic of the biggest U.S.-based crypto exchange Coinbase, closing his accounts with the company in June 2020.
In a Twitter thread, the Black Swan author explained that Coinbase has negative cash flow, meaning it has more outgoing than incoming money. He adds that it’s a “grisly” future even if the crypto industry manages to recover.
Taleb called Coinbase worthless while pointing out that its owners have been getting out. Despite the grim outlook, he noted that he does not believe Coinbase will face the same fate as FTX. He tweeted:
Disclaimer: Headlines are misquoting me on $COIN Coinbase. I said nothing abt their holdings & risks of blowup, no analogy to FTC. My point is that they are cash-flow negative, w/a grisly future (even if crypto come back) & OWNERS have been getting out. The company is worthless.— Nassim Nicholas Taleb (@nntaleb) November 27, 2022
Is Coinbase in Trouble?
Last week, we reported that Coinbase’s stock fell to an all-time low after investors’ faith in centralized exchanges was dented by the FTX collapse. However, the company’s issues may run even deeper, as its fee revenue declines.
Coinbase’s business model is the major source of the company’s problem, with its fees around the highest in the market. The high fees have kept many users away from Coinbase, with Binance benefiting more from the FTX crash.
On the Flipside
- Coinbase has launched an initiative to help encourage more transparency among firms in the industry, along with a $500,000 developer grant program.
Why You Should Care
With decreased cash inflow into the industry and its high fees, Coinbase would need to restructure its business model to circumvent its financial crisis.
The performance of Coinbase’s shares is covered in:
Coinbase (COIN) Shares Reach All-Time Low as Crypto Stocks Continue to Get Crushed
More doubt about the company is covered in:
Changpeng Zhao Deletes Doubtful Tweets About Coinbase BTC Holdings, Crypto Twitter Reacts