Even as cryptocurrency prices rebounded in the first quarter of 2023, Coinbase Global's ( NASDAQ: COIN ) transaction volumes, which account for a large portion of total revenue, roughly stalled from Q4, Bank of America analyst Jason Kupferberg wrote in a note, citing data from CoinGecko. In Q1, the crypto exchange's transaction volumes were about flat Q/Q at $145B, the note said, falling short of the Wall Street estimate of $169B. Coinbase ( COIN ) is expected to publish Q1 results on May 9. COIN app downloads of 2.7M also slumped 6% from Q4, data from Sensor Tower showed, marking the lowest quarterly mark since Q3 2020. In turn, bulls may be disappointed as they reckoned last year's collapse of fellow crypto exchange FTX ( FTT-USD ) would provide an opportunity for Coinbase ( COIN ) to gain market share. Another key revenue source of COIN is interest income earned on USD Coin ( USDC-USD ), the second-largest stablecoin by market cap. "While we do not see much risk to COIN’s 1Q interest income, USDC’s market cap has fallen 24% since the bank crisis started [last month], which could add risk to interest income ests over the next few quarters," said Kupferberg, who maintained his Underperform rating on COIN. Coinbase ( COIN ) is also grappling with regulatory headwinds after receiving a warning that SEC staff recommended enforcement action against the company for allegedly breaching securities laws. COIN gapped down 3.9% in Thursday morning trading, but rocketed 75.1% year-to-date alongside a broader rally among cryptos. Seeking Alpha contributor Kurt Christensen thinks the stock is a Buy "if you think crypto currency is sticking around."
