Bitcoin down 52% since May, Dogecoin that Elon Musk was pumping on Twitter and SNL down 77%.
Not hearing so much about it anymore?
I like the chances of my COIN puts.
Company has a 30% margin now. If it loses half its revenue and margin goes down to 15% because of fixed costs, that’s a 75% decline in profit.
What’s a fair PE for a company with a 50% decline in revenue and 75% decline in profit that has rapidly growing competition and may get shut down at anytime and sued out of existence for selling unregistered securities? Well it will be 150 P/E in that case at its current price.
And a 50% decline in revenue is very possible. Trading volume is way down. And whenever I log into paypal I see a “buy crypto” link. Who needs a new account at Coinbase?
As far as an entry point, they are about to report a record quarter that includes the April/May frenzy. That could send them up, but they are supposedly under a legal obligation to note that the current quarter revenues are collapsing.
Balancing this, I say go in about half way now, wait a month or two for a better entry point.
BTW coinbase charges $3 + 0.5% of each trade. So for a $600 trade, you pay $6 or 1%. By contrast, stock brokers these day are almost all no commission. One of a million ways crypto is greatly inferior to all the things it supposedly is going to replace.
The bubble was pumped to new highs by people bragging about their gains. Now everyone is down 52-90% in just 10 weeks. The people who bought the dip got creamed.
Crypto produces absolutely nothing of real economic value, but has a gigantic ecosystem of pumpers, scammers, traders, programmers, miners, etc that need to eat. Roughly speaking, there needs to be at least $3 billion a month of cash inflows from new suckers to trend water. It was a lot more than this early in the year, now it is less.
