Fintech stocks have been under pressure for more than a year, as negative trends have hit this high-growth sector hard but on Wednesday, shares of both credit-scoring pioneer Upstart Holdings (UPST) and bitcoin exchange behemoth Coinbase Global (COIN) went dramatically higher, reclaiming lost territory.

To justify increased stock prices, consider what happened with Upstart and Coinbase.

The stock market has remained resilient in 2023, demonstrating its ability to recover from setbacks in 2022.

Even when stocks start the day with losses, as they did on Wednesday, they frequently recover by the end of the trading day.

Upstart Resumes its Upward Trajectory

Upstart’s stock rose 28% on Wednesday, as the artificial intelligence-powered credit-scoring and lending marketplace provider revealed fourth-quarter financial figures that reassured some investors about the company’s prospects.

To be sure, Upstart’s fourth-quarter results were dismal.

Revenue of $147 million was down by more than half year on year, reflecting the difficult lending climate, particularly on the personal-loan side of the business.

Transaction volumes decreased 62% year on year to around 154,500 loans, while conversion rates fell from 24% a year ago to 11% in the most recent quarter.

Upstart reported an adjusted loss of $0.25 per share, reversing a profit from the previous year.

Furthermore, this fintech company anticipates further financial hardship.

It expected revenue of around $100 million in the first quarter, with adjusted net losses of $70 million.

Nonetheless, Upstart CEO Dave Girouard believes that the company’s sophisticated technology, improved modeling to take advantage of AI, and more diverse data set, which now includes certain periods of economic slowdown, have put it in a stronger position for 2023 and beyond.

Shareholders appear to agree, as the stock has now risen 75% from its lows, albeit remaining much below its highs from the previous two years.

Coinbase is Riding the Cryptocurrency Trend

Meanwhile, Coinbase Global’s stock concluded the previous session up 17%.

The cryptocurrency exchange will not announce its financial results until next week, but it received some good news from the crypto markets and stated that it is well-positioned to deal with the recent industry developments.

Coinbase does well when the cryptocurrency markets go well, and a 5% to 10% increase in the price of significant digital assets aided the exchange provider’s chances.

Strong crypto markets tend to increase exchange client activity, and Coinbase’s revenue is closely related to levels of trading activity.

Furthermore, this fintech company stated that it believes it currently conforms with a recent Securities and Exchange Commission (SEC) plan to impose new restrictions on qualified custodians for digital assets.

In general, the SEC wants custodians to hold assets in a way that protects clients from damages if the organization files for bankruptcy or becomes insolvent.

Other concerns to crypto investors remain, like potential rules that would prohibit crypto staking practices.

Nonetheless, Coinbase stockholders believe that the protracted crypto winter is finally coming to an end, which is excellent news for the industry as a whole.

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