Coinbase loses millions of users, and dan dolov of mizuho makes sense of the carnage and crypto focused stocks. Music. Welcome to cnbcs crypto world im, mckenzie sagalos. The wild ride for crypto markets continues yet again by noon. Eastern bitcoin prices recovered from a 9 decline to 29 000 earlier in the morning, ether was in the red 2 trading around 2 300 and we dont normally cover stable coin price moves for obvious reasons, but the terra usd stable coin is taking a beating today, its Down from its one dollar, peg to just 50 cents, so lets talk a little bit more about whats happening with tara, much like the ust stablecoin, the platforms luna token, also crashing overnight it faced a 90 decline in just about 24 hours. That insane free fall is all tied to the luna foundation, doing everything that it can to bring tara usd back to being worth one dollar. The foundation issued more than 46 million luna tokens in the past day and co. Founder kwon announced that it would be minting. Four times the usual number of ust stablecoin in the hopes of riding the ship, but some argue that the efforts from the luna foundation to stabilize its tokens shows just how centralized the platform is all right on to some other top stories were covering microstrategy ceo, michael Saylor is assuring investors that the company has enough collateral to make it through a margin. Call saylor took to twitter to say that the company could pay back its bitcoin backed loans, even if the price of the cryptocurrency fell as low as 3 000.

The company also recently said that it would buy more bitcoin at the 21 000 level, which is pretty much in line with what sailor told cryptoworld at bitcoin 2022.. Now i tell people we will be buying bitcoin at the top forever im, not im, not trying to time the market. I dont intend to stop um mike, you could think of a micro strategy as um were kind of like your your non existent spot etf, and when will we stop well? Why would we ever stop well? Well, just keep accreting. It should get exponentially more expensive to buy the bitcoin but thats okay. Finally, coinbase says it lost 430 million dollars last quarter and that millions of users are fleeing the exchange. The company also said trading volume on the platform fell by more than 200 billion dollars. Amid that steep drop in monthly active users in all the company reported a 27 drop in revenue from the previous year, coinbase executives doubled down on its argument that it should be seen as a long term. Investment thanks to the volatility of crypto for todays main story. We wanted to take a look at some of those crypto focus stocks that are taking a beating coinbase shares down a whopping 55 percent microstrategy shares down 41 and right blockchain stock down around 33. All in the past week, crypto worlds, kate rooney spoke to dan dolov of mizuho to find out what is putting coinbase and other crypto focused stocks under pressure.

Coinbase reported last night and disappointing numbers talk about the big metrics that youre watching and your take on the first quarter for coinbase yeah. Look at this is the quarter. Weve been sort of waiting for, as the you know, bearish kind of more bearish view on this. Talk, i think that the big things that were watching here are you know, mtus the monthly transacting users. They promised five to 15 million theyre actually running below that which means to even get to the midpoint of the guide. Theyre gon na have to ramp dramatically in the second half. I dont see that happening in this environment. The big news today, like the big news that that people should be paying attention for is the language around the 500 million dollar loss for the year. It sounds like thats more of a reality today than it was say in february, where they first got it theyre burning a lot of cash and theyre investing, which means that those losses are actually real, got it and potentially losing market share. I know mizuho has done some work on that uh talk about your expectations for coinbase, on the retail side of the business and some of the competition thats entering the market yeah its a great point, so you know it. It turns out that barriers to entry in crypto trading are very low, so what happened is youve? Had a company out of singapore did a lot of advertising on the super bowl did a lot of like you know, stu, you know, stadium, naming rights and all of a sudden theyre coming from nowhere and theyre starting to gain shares.

So weve done some analysis that shows you that theyve actually started gaining share at the expense of coinbase. We think again, this is our view and – and it just shows you – i wouldnt say its easy, but with enough marketing dollars, you can actually sort of take over. So those you know those barriers to entry right, the walls around the the company, like the famous warren buffett um, you know walls around the company, they dont really exist and, i think thats. The fear here is that theres, really not the moat isnt as strong as people thought it was say a year ago, the moat right, um thats interesting. Well, i wonder too brian armstrong and alicia haas, the cfo and um ceo talked about the nft business, diversifying revenue and the long term vision in the bowl case really for coinbase any signs that that is becoming a reality and theyre able to move away from just Trading revenue yeah, i mean look the the actual. This is another great point: im not surprised, but uh. You always make great points. So the um you know like the software and services revenue was down like 25. Excuse me a quarter of a quarter, so it was 213 million in the fourth quarter down to 151 or so so dramatic decline in that now wheres that nft going uh. We think that theyre spending 300 million dollars, plus on an industry thats questionable by itself like youre, seeing there has been some wall street journal articles weve actually called it out a month ago.

If you remember uh about how the interest in nft is starting to fade. As theyre investing, so i think this is, i would say this is kind of a me too um in in a questionable market, so i think it actually dilutes the mode it doesnt improve the mode, got it interesting and the stock price. You know the stock has been punished really since the beginning of this year, sort of end of last year and its down even more deeply than bitcoin weve talked about some of the crypto related stocks trading in tandem. But if you lay those out side by side, coinbase is actually performing a lot worse than bitcoin uh. Can you walk us through that in terms of why some of these crypto related stocks are underperforming, bitcoin itself, yeah thats, actually its it theres? Actually, a very simple explanation for that in in my opinion, which is, if you own bitcoin, then youre only you know youre youre, basically youre gaining when it goes up and youre losing when it comes down. If you own any of you know, i would say coinbase because thats really the the big crypto stock, that we cover youre, basically getting bitcoin, plus alternative coins right minus the potential of feed aggregation, so its kind of like youre youre, youre, almost better off playing the Pure play, you know cryptocurrencies than playing those those those traitors, because if you remember like from the old days from like, you know the tedious marriage race and the charles schwabs of the world, you know great companies, but trading commissions went to zero right, partly because of Robin hood, which we like, so i think that thats, where trading commissions are going to and its kind of what i said before, like that two basis, point on the institutional side should be very worrisome for anyone, thats thinking that trading commissions are going to stay above.

One percent uh for retail theyre going down and – and i think, thats why the actual currencies, the actual cryptocurrencies might be better or its been proven to be better than owning the exchange and what about block thats, another payments, company or fintech company that you guys have Covered and youve covered for a while um talk about their crypto business. The stock actually has been sort of tied up in the narrative around cryptocurrencies, despite not making a huge percentage um of net income from that line item. Why is square or block? At this point? A crypto company yeah its a bit of a shame right i mean, as youve rightfully noted, you know, uh bitcoin revenue makes up less than five percent or four percent of of gross profit theyre doing a tremendous job elsewhere right were seeing gross profit for the cash App accelerate were seeing the seller business hitting on all cylinders, and yet they get, as you said, punished because of this crypto stock association. I think that, partially to blame, uh id say like partially, like i think, a lot of it has to blame with you know the managements focus on on on bitcoin in terms of the visibility and kind of being amongst the uh. You know its very famous that the ceo is one of the sort of uh the most uh outspoken people about bitcoin. So i think when bitcoin goes up, it helps them a little when bitcoin goes down, it hurts them a lot, so it it.

I think that maybe they need to do um a bit of rethinking and how they position themselves, because the company itself, the fundamental, very different from coinbase. The fundamentals are rock solid and theyre getting better before we go cnbcs jim cramer, also weighed in on the coinbase, sell off heres what he said when you look at something like a coin base, its just terrible, but gary gensler told you it was terrible theres a Lot of people, carl, who told you things were terrible. You know told you that that that these coins that were stable coins were terrible and people just ignored them. I mean, i think the coinbase is just another asset. That is chimerical. I mean we dont need it.