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The crypto world is in a crisis, and whenever there is a crisis, a lot of companies face an enormous amount of losses.
Such is the story of one of the biggest cryptocurrency companies- Coinbase.
As a result of Moody’s downgrading Coinbase’s Corporate Family Rating (CFR) to Ba3 from Ba2 and its guaranteed senior unsecured notes to Ba2 from Ba1, the largest cryptocurrency exchange in America is under pressure.
Moody’s said in a notice on Thursday-
“Today’s rating action reflects Coinbase’s substantially weaker revenue and cash flow generation due to the steep declines in crypto asset prices that have occurred in recent months and reduced customer trading activity,”
These are all due to the disappointing first-quarter earnings report by Coinbase.
According to the report, Coinbase is facing a quarterly loss of $430 million.
Along with that, there is a 19% drop in the monthly users.
We all know that the cryptocurrency crash has affected everyone. This includes the bitcoin crashing below the $20,000 mark.
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Future evaluations of Coinbase’s ratings by Moody’s will take a bunch of things into account, such as whether the downturn in crypto asset prices and trading volumes will stay the same or get worse, as well as the business cash and non-cash expenditure path over the next twelve to eighteen months.
It is a great test for the company to show its perseverance and resilience during this moment of crisis.
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