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Jim Cramer Advises Against Investing in Coinbase Stock as It Drops Nearly 30%

Coinbase Global Inc (NASDAQ: COIN), the largest cryptocurrency exchange in the United States, has experienced a significant loss in its stock price in recent weeks, dropping nearly 30%. Despite this drop, famed investor Jim Cramer does not see it as an opportunity to invest in the company.

Cramer expressed his disappointment that Coinbase did not benefit from inflows during recent bank failures, as he had thought it would become the JPMorgan of the cryptocurrency business. However, this did not occur, and he stated that he would not touch the stock at all. On CNBC’s “Squawk Box”, he said:

I figured that, not to me, but to some people they were the JPMorgan of the business. So, the money goes to JPMorgan. Doesn’t look like it. I wouldn’t touch this thing at all.

The disappointment in Coinbase’s performance is further highlighted by the recent announcement that the company received a Wells notice from the Securities and Exchange Commission for violating U.S. securities laws.

Adding to the negativity, a Bank of America analyst, Jason Kupferberg, cited data from CoinGecko and said that transaction volumes for Coinbase remained roughly flat in the first quarter, missing consensus by $24 billion. This is particularly significant as transaction volume makes up a significant portion of the company’s total revenue. Kupferberg also noted a 6.0% decline in app downloads, which he sees as cause for concern.

However, it is worth noting that year-to-date, Coinbase stock is still up 90%. This suggests that despite recent disappointments, the company has still experienced substantial growth.

Despite the mixed opinions, it remains to be seen what the future holds for Coinbase. With the increasing popularity of cryptocurrencies, it is clear that the demand for cryptocurrency exchanges will continue to grow. However, whether Coinbase will be able to maintain its position as the leading cryptocurrency exchange in the United States remains to be seen.

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