Coinbase inches higher ahead of earnings as Silvergate slips after downgrade

Quick Take

  • Coinbase traded up by about 1%. The exchange will release Q4 earnings after the close.
  • Silvergate dropped over 5.6% following its latest downgrade. 

Coinbase climbed higher shortly after the open today, while Silvergate and other crypto-related stocks dipped. 

Shares in the crypto exchange traded up by 1% to about $66 by 10:45 a.m. EST, according to Nasdaq data.

Coinbase is set to deliver earnings after the close today, with revenue expected to have fallen to $589 million, according to FactSet estimates. 

Coinbase also faces renewed regulatory scrutiny, with analysts expecting the topic to dominate the earnings call later today. U.S. regulators set their sights on crypto-staking services two weeks ago, and COIN tumbled 22%.

KBW analysts estimate 13.4% of the company's net revenues for 2023 will come from staking, with a large majority driven by retail. With about 75% of retail staking revenues passed back to clients as staking rewards, "we model staking to only contribute 3.5% to COIN's 2023 gross profits," analysts at KBW, led by Kyle Voigt, said. 

Elsewhere, Silvergate shares dipped by 5.6% after Moody's said it downgraded the ratings of Silvergate Capital and its bank subsidiary Silvergate Bank. Silvergate Capital's long-term issuer rating was cut to B3 from B1, and the outlook remains negative. 

MicroStrategy dropped 5.2%, and Jack Dorsey's Block slipped 3.3% in the same period. 

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