00:00I think there is a change of heart obviously when they reported earnings in
00:03February and guided for the first quarter they were guiding for the
00:06expenses to be roughly flat which kind of raised the eyebrows a little bit
00:10because the activity levels were trending down and there were some
00:16concern but going back to December when they announced the build out of
00:20everything exchange there are a lot of investments that they have been making
00:23so they mean basically wanted to maintain those investments going forward
00:28but clearly three months later we do get some change of heart here so we're
00:34talking about 14% of coinbase's workforce being cut I guess that amounts to about
00:39700 jobs is AI behind this cut I would think that AI is probably part of the
00:49equation but not necessarily the driver they did in Brian Armstrong's post on X
00:55they did mention the volatility as being the biggest issue so even we've seen the
01:00Bitcoin price dropping from 125,000 to 65,000 and it's probably what 81,000 today
01:07so it's coming back in the second quarter but there is a lot of uncertainty so
01:11they trying to adjust to that mainly they're also as part of the transition
01:15they're cutting out some management levels so they trying to optimize the
01:18business and maybe AI is the helper there where the managers can actually be
01:24the individual contributors as well so Paul you know I think a lot of people
01:28know coinbase as simply a platform to buy and sell cryptocurrencies so is is this
01:35stock primarily entirely partially driven by the price of Bitcoin if you look at
01:42the stock chart part of that reaction is kind of similar to what the Bitcoin is
01:47doing but if you look at the businesses that are in the subscription and
01:52services businesses the staking the payments and all those other things that
01:56they're building there's really a lot of other things happening across the
02:00entire ecosystem including the tokenization and getting even into more
02:05traditional markets like equities and certainly coinbase is not alone right I
02:10mean you've got a number of companies in this space announcing job cuts
02:14recently block Gemini space station comes to mind I think crypto.com what are the
02:20reasons why that these companies are offering for why they are tightening
02:24their belts I think so I don't think it's necessarily a long-term problem I
02:32think it's more of a cyclical problem and because the cycles are so short in
02:37those businesses the technology develops so fast they really have to adapt and
02:42adjust almost on an annual basis or every few years when things change very
02:47dramatically so they do have to refresh their workforce so Paul what's the
02:52what's the next step for coinbase here what's kind of the bull case for this
02:57stock here I think the bull case is the ecosystem in the on the blockchain and
03:04tokenization the base layer programming that they're building that can allow
03:08their users to build on that blockchain the tokenization of different kinds of
03:15assets so we're just having a lot of things in terms of payments market
03:19structure and things like that shifting very dramatically on to usage of
03:24blockchain so I think that's where the opportunity is for them
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