More Problems at Coinbase (COIN)

On November 17, 2022, The Bear Cave published on the crypto banking collapse and warned that a collection of U.S. banks had significant exposure to the crypto industry through deposits, loans, and trillions of dollars of payment transfers that could leave them with significant liability, losses, or risk of rapid deposit outflows. One of those banks, Signature Bank (NASDAQ: SBNY), failed yesterday.

On December 1, 2022, The Bear Cave published on problems at Silvergate Bank (NYSE: SI) and wrote that “Silvergate’s potential regulatory infractions, shrinking deposit base, and diminishing credibility are not being fully recognized by the market.” Since then, shares have fallen ~90% and the bank announced it is entering liquidation.

Today, The Bear Cave is publishing additional concerns about Coinbase (NASDAQ: COIN — $12.4 billion). The Bear Cave believes Coinbase currently faces a perfect storm of problems including ballooning losses and legal liabilities, the collapse of bank partners, and a volatile stablecoin that all add pressure to its deteriorating core business.

As a reminder, The Bear Cave does not bet against the companies we write about and only makes money from reader subscriptions.

Let’s dig in.