Coinbase stock continues to slide ahead of earnings report
Shares of publicly traded crypto-focused companies are extending their recent slide, reflecting anxiety about the position of the broader market.
America’s largest exchange,
Coinbase Global Inc.
COIN -11.90%
dropped 79% from its all-time high in November 2021 when bitcoin hit a record $67,802.30. The company’s shares have fallen 34% this month.
Headquarters in California
COIN -11.90%
is set to report earnings on Tuesday after the market close. According to FactSet, analysts expect a first-quarter loss of one cent a share, down from $3.05 a year ago.
The company has its stock market debut on April 14, 2021 and the share price jumped as high as $429.54 in the first few minutes of trading and ended the session at $328.28. Shares have fallen 77% since then.
Coinbase‘S
market capitalization fell to $17.27 billion on Tuesday from about $32 billion in mid-April. Since the company derives most of its revenue from transaction fees, lower transaction volumes have recently affected revenue.
Other crypto stocks have also fallen sharply.
Silvergate Capital Corp.
down 39% so far this year,
Marathon Digital Holdings Inc.
slipped 62%,
Riot Blockchain Inc.
failed 65% and
TeraWulf Inc.,
a bitcoin mining company, down 80%.
Federal Reserve last week interest rate increase rose half a percentage point, the biggest gain in more than two decades, prompting investors to dump speculative companies’ shares further. The prospect of increase by half a percent caused a drop in stocks and bonds as money managers worried about the end of the era of easy money when risky bets prospered.
Cryptocurrency stocks closely track crypto prices, often falling or climbing in tandem. This year, however, crypto stocks is getting worse than digital currencies. Bitcoin is 45% off this year, while ether is down about 40%. On Tuesday, Bitcoin price increaseup 0.4% to $31,075.70 from Monday’s 5 p.m. ET level.
The third largest stablecoinTerraUSD, which is considered to hold value at $1, fell to a low of 69 cents on Monday, prompting a flurry of investors to sell their holdings.
This year’s roadmap has punished large cap tech stockstoo.
Netflix Inc.,
parents
Meta . Platform Inc.
and
Amazon.com Inc.
are all down by more than a third this year. Meanwhile, the tech-oriented Nasdaq Composite fell 25%.
Sentiment towards unusable tokens, or NFTs, also hypothermiasignal an explosion of risky bets.
For now, investors are waiting for consumer price inflation data to be released on Wednesday. If the data shows that inflation has peaked, analysts say it could affect the Fed’s aggressive tightening plan.
Write letter for Hardika Singh at [email protected]
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