Jim Chanos: “Predatory Junkyard That Is Crypto”

Jim Chanos – founder of Chanos company – discussed Coinbase’s business model in the “Halftime Report” with CNBC. He stated that business operating costs in the American public trade company Coinbase are high.

“Symptomatic of the predatory junkyard that is crypto” – Jim Chanos expressed his viewpoint “this is a really high-cost industry that needs lots of activity and needs really high commission rates to make money.”

“If you’re losing money now, charging retail customers 2.5% a round trip, that’s not a suitable business model,” Jim Chanos added. Being said, Coinbase and other crypto exchange firms could be the subjects of upcoming high-rate interest US regulation.

Chanos stated that Coinbase has burnt around “around $1.5 billion” a quarter – such a huge amount of money as it controls up to 10% of the worldwide crypto market. It means if the firm enlarges its impact on the crypto industry and the entire economy, “the crypto universe has a cost of between $50 to $60 a billion on a 1 trillion notional.”

At that time, the shares of Coinbase has dropped above 9.3% on NASDAQ, as the result of such warnings from Wells Fargo regarding to the macro pressures, and of course, the comment of Jum Chanos also added the negative viewpoint of Coinbase’s development.

This firm is in the time of crypto winter with a market cap of around $13.88 billion, far away from its peak of $75 billion in January last year. Its stocks are still on the plunge from early this year.

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Ken

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