[ad_1]
Exchange News - Moody’s anticipates the company’s profitability to remain strained.
- COIN has rebounded so far and is presently trading 60% higher since start of 2023.
On Friday, credit rating agency Moody’s said that it has reduced Coinbase’s (COIN) credit rating and guaranteed senior unsecured notes due to the company’s significantly diminished revenue and cash flow production capabilities.
The long-term rating that represents the possibility of default on a business family’s debt, known as the corporate family rating (CFR), was downgraded from Ba3 to B2 for Coinbase. The firm announced a downgrading of its guaranteed senior unsecured notes from B1 to Ba2.
Despite the company’s plan on January 10 to cut its worldwide staff by around 950 people, Moody’s anticipates the company’s profitability to remain strained, the rating agency said. Moody’s gave a gloomy prognosis for Coinbase’s earnings because of the aftermath of the FTX exchange’s bankruptcy and the potential regulatory tightening that might follow in the crypto sector.
Major Income Source Sluggish
Moody’s stated that the path to changes and improvements in the regulatory framework is highly unpredictable and could prove destructive to crypto market participants, despite the fact that increased regulatory oversight may ultimately benefit the relatively more mature and complying crypto-asset platforms like Coinbase.
Coinbase had its long-term credit rating and senior unsecured debt rating lowered by the largest global ratings agency S&P Global Ratings earlier this month for identical reasons.
When cryptocurrency prices plummeted in 2022 and crypto companies like Three Arrows Capital, Celsius Network, and FTX went under, trading activity for cryptocurrencies, Coinbase’s major income source, halted.
COIN has rebounded so far in 2023 and is presently trading 60% higher since the beginning of the year, mirroring a pattern witnessed in other cryptocurrencies this month despite repeated stock downgrades since December.
Recommended For You:
Class Action Lawsuit Filed Against Coinbase Over Flare Token Airdrop
[ad_2]
Source link
Comments are closed.