Bitcoin, after surging to a price of almost $70,000 last year, has crashed back to around $40,000 as the red-hot crypto market cools.
The bitcoin price has somewhat recovered from lows of $35,000 per bitcoin last month but has failed to rally convincingly amid fears of increased regulation and the looming end of pandemic-era stimulus measures.
Now, veteran fund manager Jim Chanos has issued a serious warning over bitcoin and crypto exchange Coinbase—calling it a “bubble stock.”
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The bitcoin price has fallen sharply in recent months, raising fears over the future of crypto … [+]
2018 Chesnot
“Coinbase is what we would call one of the bubble stocks,” Chanos, the founder of Kynikos Associates, told CNBC in an interview, revealing he’s now shorting Coinbase—meaning he’s betting the price of Coinbase stock will fall.
“We think that as competition increases in crypto, and this is not a call on crypto or bitcoin prices or anything like that, but we think as competition increases amongst the exchanges, you’re going to see fee compression, and as it is Coinbase will probably not be profitable this year with a $40 billion market cap.”
Coinbase, which made its closely-watched Nasdaq debut in April last year, has seen its value plunge by almost half, falling sharply along with the bitcoin price.
“We’re seeing the economics starting to diverge,” said Chanos, referring to Coinbase stock’s link to the bitcoin price and…
