Fund Manager Jim Chanos Says He’s Shorting Coinbase

Jim Chanos told CNBC Friday he’s shorting cryptocurrency exchange Coinbase (COIN), calling it a “bubble stock.”

• Chanos expects fee compression as competition increases across crypto exchanges, and doesn’t think Coinbase can be profitable this year.
• “We basically think Coinbase is over earning,” Chanos said in the interview. “If you do the numbers, their revenue base is roughly 3% to 4% of their custodian assets, their customer assets.”
• CNBC’s report did not mention the size of Chanos’ short position.
• Wall Street has remained positive on the longer-term outlook for Coinbase, despite expectations for some near-term headwinds. Analysts expect Coinbase to diversify its revenue from different segments, including non-fungible tokens (NFT).
• Coinbase shares were down about 1.8% in after-hours trading Friday, and have fallen 26% this year.

Read more: Coinbase’s NFT Segment Could Add More Than $1B to Annual Revenue, Needham Says