S&P Global downgraded its corporate rating on bitcoin exchange Coinbase from “BB+” to “BB” with a negative outlook.
Analysts justified the decision with “weak earnings and competitive pressures.”
“The company’s market share has declined this year. Combined with the increased risk of margin squeeze, exceeding the degree of variability in revenue, EBITDA and EBITDA margin of previous estimates, this led us to revise our financial risk assessment,” the experts explained.
The rating action is also dictated by “uncertainty about the duration of the crypto-zima and the potential for further declines in market share,” they added.
Recall, Coinbase received $1.1 billion quarterly loss.