In an interview with CNBC, Jim Chanos said he has started shorting shares of cryptocurrency exchange Coinbase. He added that the company’s stock is already in a bubble.
Chanos expects commissions to decline as competition in the crypto-exchange markets grows. He also believes Coinbase will not be profitable this year.
“Basically we believe Coinbase is making too much money. If you do the math, their revenue base is about 3% to 4% of their depository assets,” Chanos said in an interview.
The CNBC report does not mention the size of Chanos’ short position. However, Wall Street remains positive about Coinbase’s long-term prospects, despite some short-term market developments.
Analysts expect Coinbase to diversify its earnings from various segments, including NFT.
Coinbase stock is down about 26% this year.