Wall Street has lowered earnings expectations for once high-flying fintechs Coinbase and Block, as a chill in the cryptocurrency market adds more pain to the companies already grappling with surging costs and rapidly rising rates.
Coinbase, which has the biggest exposure to crypto volatility, has lost more than three quarters of its market capitalization this year. 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.The cryptocurrency selloff has dragged down multiple companies in the sector, with some even seeking bankruptcy protection. Bitcoin, the largest cryptocurrency, has nearly halved in value in the first seven months of the year.
Estimate cuts and competitive pressures are also contributing to the weakness in fintech stocks, according to Credit Suisse analysts.