Coinbase Stock Slides 5% as Binance Hack Overshadows Q3 Earnings

Coinbase stock fell nearly 5% in after-hours trading as the Binance security incident overshadowed its third-quarter earnings. COIN dropped to $152.98 after closing regular trading at $160.59 on October 29.

The selloff coincided with broader cryptocurrency market weakness and concerns about exchange security. However, Coinbase reported growing market share and expanding revenue opportunities beyond traditional crypto trading.

Coinbase Stock Falls After Binance Hack

Coinbase and other crypto exchange stocks dropped today as investors came to terms with the Binance hack, the largest on record. Bullish and Gemini shares also dropped by over 5% in the extended hours.

According to Binance, hackers managed to access $6.3 billion in assets. Some of these assets, worth about $3 billion, were frozen by Tether and Circle. The rest of the funds were quickly converted into Ethereum and other altcoins, with the hackers ensuring that they cannot be frozen.

Binance has maintained that its platform is safe and that its users will have full access to their funds. That is possible because Binance has billions of dollars in reserves.

Still, the complexity of the hack means that other crypto exchanges may be exposed to similar hacks as well. The probability of the hacks has grown higher because of the growing artificial intelligence (AI) and quantum computing technologies.

Anthropic and OpenAI have both reported incidents in which their AI agents escaped their sandboxes and hacked computers. As such, as AI models gets more sophisticated, there is a risk that they will be able to execute hacks in the crypto industry over time.

There is also fear that no crypto exchange is safe if hackers can hack a large crypto exchange like Binance. These fears explain why Bitcoin and most altcoins continued falling on Friday, with BTC moving below $80,000.

Coinbase Published Strong Earnings

The latest Binance hack comes after Coinbase published a strong quarterly report. In a statement, the company said that its trading volume market share rose to 10.7%, the fourth consecutive quarter of growth.

The report showed that Coinbase’s revenue came in at $1.2 billion, down sharply from the $1.86 billion it made last year. This decline was mostly because of the crypto winter that affected Bitcoin and most altcoins.

The company’s net income jumped to $718 million from $432 million in the same period last year. That increase was driven by the gains on crypto assets held for investment, with Bitcoin and Ethereum prices rising in the final parts of the quarter.

Most importantly, it seems like Coinbase’s diversification effort is paying off. For example, its prediction markets grew to $200 million in annualized revenue, while the number of Coinbase One subscribers continued growing.

Additionally, Coinbase is addressing its cost issues. It has now narrowed its adjusted expenses range for the year to between $4.15 billion and $4.3 billion, down from the previous range of $4.2 billion to $4.45 billion.

COIN Stock Price Technical Analysis

Coinbase shares initially rose after releasing its earnings report and then pared back some of those gains after the Binance hack. It dropped to $154 in the extended hours.

The stock remains below the 50-day and 100-day moving averages. At the same time, it has remained below the Supertrend indicator, while the Relative Strength Index (RSI) has continued falling.

Therefore, the stock will likely drop further in the near term. After that, the stock will likely bounce back in the coming weeks as the Binance hack news story starts to fade.

This article is for informational purposes only and does not constitute financial advice. Cryptocurrency-linked equities involve substantial volatility and potential losses. Investors should conduct independent research before making financial decisions.