Short-selling veteran Jim Chanos warned that COINBASE and MicroStrategy are likely set for more weakness this year.
Speaking with the Crypto Critic’s Corner podcast, Chanos said the margins Coinbase earns from trading commissions are too high when compared to traditional brokerages.
He said the 1.5% trading commission margins earned by Coinbase are likely to fall to 0.5%, amid increasing competition in the space. Chanos had revealed a short position on the firm in March.
Chanos, who famously shorted the Enron collapse of 2001, called MicroStrategy a “high wire act,” and expects the stock to largely track Bitcoin prices this year.
Is Coinbase losing money?
The crypto exchange’s recent earnings report suggests that there may be merit in Chanos’ position. Coinbase logged a $430 million loss in the first quarter. Total transaction revenue- the company’s biggest source of income- dropped by over 30% from last year.
