We turn to our daily segment highlighting the best Bloomberg intelligence and the focus role has been on while the crypto
winter and where we are within that crypto winter right now of course Coinbase actually might have some of the best resources
to ride out that storm. Let's bring in our Bloomberg intelligence senior analyst Paul Michael Barr here for more.
Well what does the mere research show you about some of the activity that could rebound the strength of the retail the
institutional investor as well as the balance sheet and the health of that. Thank you for having Taylor. So first of all
let's look at the monthly transaction users. The guidance is for 79 million users on average. That's below last year but it's way
considerably higher than the year before. So we are moving in the right direction and they are begin where to begin
rebounding. That number should get considerably better. The question is really the time and this is going to be a matter of
several quarters for retail. Investors are going to stay on the side for longer. One your mention of the institutional investors
obviously Quinn being prime has been very big development. It has been growing. It has a much smaller revenue capture if you
in terms of traditional exchanges language. But obviously the recent deal with BlackRock and a lot of movements in that
direction is positive. And then lastly the balance sheet when the market gets stopped it's all about the balance sheet for the
companies who can survive it. Coinbase has about six billion dollars and most of it is the actual cash not the coins. So Paul
can you talk to us a little bit about what might actually catalyze that recovery in activity by the retail and or
institutional investor for Coinbase. Well there is I think there are several things. So there is a
trade an aspect of it which is definitely a possibility. But you do need a much more
positive environment for that. But on the other hand you have a lot of the additional services that Coinbase is developing that
you do need the actual tokens for. So that may drive the activity. It's theory emerge is to happened on September 15. So
that might impact their stake in business. So there are certain catalysts that are more recurring revenues that could be
positive for Coinbase going forward. In addition to the kind of bolstering the activity itself. Paul I'm gonna go a little bit
broader because my husband is a senior manager over at Coinbase but I want to look more at the industry group in general. Are
you seeing some of the regulatory pressures becoming more transparently. So
are we starting to understand where the rules of the road are can be put in place. Is that going to be any catalysts going
forward. It possibly could. Because Coinbase has always been more
diligent in terms of their exposure to regulations. There are many regulatory licenses globally. A lot of licenses in the U.S.
So they're really focused on that. Even if we think about this theory emerged. The CEO of Coinbase Armstrong just said recently
that if the regulators will not allow the stake in business even though it might be very lucrative for them they will not do it.
So they really one of the changes out there who are focused on the regulatory environment. Paul can you again a little bit to
the levers of past profitability for this company. I mean you talked a little bit about the balance sheet how they have a
pretty big base of support from the balance sheet. But let's say we do not get any improvement in activities. And this is sort of
a fair climate for a longer period of time. What levers can this company pull to improve the profitability outlook.
Well it's really the cost lever and that's totally live in most of the companies having that kind of situation. So Coinbase is
about five billion dollars of expenses last year. The consensus for about six billion this year. But between the first and
second quarter they already cut their expectations slightly both for sales and marketing and for tech and development. That did
reduce the year for this sales force. And I'm sorry the employee force by about 18 percent recently. So if we are in a position
where several quarters away from today we are still not out of the woods. They I have to cut expenses again. Because if you
look again they can expenses base versus fund is warning that the 21 we're up several times from that.