July 20, 2024

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Coinbase down 9% this month, aligned with Bitcoin’s tumble

2 min read

Even with gains through midday Tuesday of better than 4%, to nearly $222, shares in the cryptocurrency exchange Coinbase are down about 13% since June 12, when they closed around $255. Over that same span, Bitcoin prices have dropped about 9% to about $62,000.

The equally weighted S&P 500—the version of the index that makes no distinction between the market cap of the companies—has grown a modest 0.27% this month, but nonetheless it highlights how the exchange is underperforming compared to the wider market.

But it’s also important to note that Coinbase is still in the midst of major comeback. The crypto market has rallied massively since the end of last year, and Coinbase, the world’s second-largest exchange, has enjoyed something of a renaissance thanks to soaring transaction revenue. Despite the recent dip in share price, Coinbase stock has skyrocketed year to date alongside Bitcoin—it’s up better than 40%, with the original cryptocurrency making similar gains.

When Coinbase stock slumps it’s often a reflection of digital assets writ large given how much of the company’s revenue comes from trading fees. In the first quarter of the year, transactions made up 67% of revenue. On Monday, trading volume was $788.3 million, whereas on March 4 it was almost $3.2 billion.

“Volume has pulled back quite a bit, and the price has come back from the peak in the first quarter somewhat. So [Coinbase] is going to get lower profitability in the second quarter,” Paul Gulberg, a senior equity analyst at Bloomberg Intelligence, told Fortune.

‘A lot of noise and activity’

Over the last 30 days, Bitcoin, Ether, and Solana are down about 11%, 9%, and 18%, respectively, and each has failed to gain momentum since mid-March. A key reason is the lagging performance of the 11 spot Bitcoin exchange-traded funds, which the SEC approved in January. Since then, the price of the underlying asset, Bitcoin, has ebbed and flowed with the large sums…

Niamh Rowe

2024-06-25 13:49:26

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