Wall Street has lowered earnings expectations for once high-flying fintechs Coinbase (COIN.O). Block (SQ.N), as a chill in the cryptocurrency market adds more pain to the companies grappling; with surging costs and rapidly rising rates.
Crypto exchange Coinbase is to report an adjust loss in the second quarter; while Jack Dorsey-led payments company Block is likely to post a 70% drop in adjusted profit.
Coinbase, which has the biggest exposure to crypto volatility, has lost more than three quarters of its market capitalization this year.
“For Coinbase, this is going to be a very difficult 12 to 18 months,” said Dan Dolev, senior analyst, fintech equity research at Mizuho Securities USA.
Block, which changed its name from Square last year to better reflect its focus on blockchain; has lost over half of its market value amid the stock market rout this year.