Coinbase is a digital asset company based in San Francisco, California.
Shares of the cryptocurrency exchange have fallen more than 8% Monday, extending a slide that has pushed them to their lowest point since April 2021. The drop follows a plunge in bitcoin’s price.
The slump continues, and investors worry that fallout from FTX’s shocking collapse earlier this month will spread.
The Coinbase IPO was quite a success. Nineteen months after going public with a market cap of over $85 billion, Coinbase has fallen below the $10 billion mark and has lost over a quarter of its value in the past four trading sessions.
There have been reports of new trading restrictions and bankruptcy filings by FTX competitors. The Japanese banking firm Mizuho analysts noted that daily volumes were 30% to 40% lower than average this year.
The CEO of Coinbase said in a recent CNBC op-ed that his company doesn’t have “any material exposure to FTX.” The hiss stock has dropped more than 83% this year.
As you can imagine, it can be stressful any time there is potential for customers to go missing in our industry. And the ripple effects of FTX’s struggles have impacted many people who are losing a lot of money.
Bank of America analysts downgraded Coinbase on Friday, citing “contagion risk” for the cryptocurrency exchange platform. Although Coinbase is not another “FTX,” analysts say it faces risks threatening its long-term viability.
“That does not make them immune from the broader fallout within the cryptocurrency ecosystem,” Mr. Kupferberg wrote.
A mere few months prior, the market was in the middle of a crypto winter that lasted most of 2018 and sent bitcoin and Ethereum spiraling lower.
From last month to now, the crypto exchange has seen a more than 50% decline in revenue. It also reported a loss of $545 million. In June, the exchange laid off 18% of its workforce.
Bitcoin has lost 2% of its value since Friday, and Ethereum is down 6%. Even with the big sell-off, some coins are doing just fine. For instance, Solana, which FTX founder Sam Bankman-Fried backed, has lost less than 1/3 of its value in two weeks.
FTX had a $32 billion valuation days before it went bankrupt, following customer demands and Binance’s decision not to agree on an acquisition. The FTX filed for Chapter 11 bankruptcy protection on November 11th.
The company said their assets were fine two days before their executives were desperate for a rescue. However, Kevin Bankman-Fried has since posted on Twitter that he’s trying to recover customer deposits.
In the near future, flying taxis might revolutionize the world’s travel industry.