The author of the best-selling book “The Black Swan,” Nassim Taleb, thinks that the largest cryptocurrency exchange in the US, Coinbase, is “worthless.”

Taleb said in a recent tweet that Coinbase has negative cash flow, which means that it spends more money than it brings in. He also said that Coinbase has a “grisly” future, even if the cryptocurrency industry recovers, and that its owners have been getting out.

“My point is that they have a negative cash flow, a bleak future (even if cryptocurrencies come back), and their owners are getting out. The company is a waste of time, “he said.

Taleb said that he doesn’t think Coinbase will have the same problems as FTX the bankrupt crypto exchange, which was once the third-largest cryptocurrency exchange in the world.

“I didn’t say anything about their holdings or the risk of a blowup. I also didn’t compare them to [FTX].”

Last week, well-known short seller Jim Chanos, who made a lot of money by betting early on Enron to fail, said that Coinbase’s business model is flawed because its costs are too high for the current market

Coinbase has one of the most expensive fees in the business. The spread that the exchange charges to buy and sell cryptocurrency is about 0.5%. This is in addition to possible transfer fees of up to 5%.

Chanos thinks that a company like Fidelity or Vanguard could offer basic cryptocurrency trading at much lower fees than Coinbase. Coinbase might have to lower fees to stay relevant, which will help the company’s bottom line.

Coinbase lost $545 million in the third quarter of the year, even though it made $576 million. This has also hurt the company’s stock, which has already lost more than 80% of its value this year.

Notably, Coinbase’s business with institutions hasn’t made much money either. Institutions did about $133 billion worth of trades in the third quarter, but Coinbase only made $19.8 million from those trades.

https://altcoin.ng/nassim-taleb-says-coinbase-is-worthless/