Coinbase plunges to new lows as cryptocurrency skepticism spreads | Business and Economy News

Fenika Bench

Shares plunged 23% to $56.04 in New York, a far cry from its first-day closing price of $328.28 last April.

Coinbase Global Inc. shares and bonds fell to new lows Wednesday, signaling investor skepticism about the prospects of the crypto exchange in a bear-market.

Shares plunged 23% to $56.04 as of 10:17 a.m. in New York, a far cry from its first-day closing price of $328.28 when it went public last April. Its bonds also plunged, trading in line with some of the highest-risk junk-rated notes.

Coinbase is “unlikely to return to recent levels of profitability in the near term absent a significant increase in crypto prices or volatility,” Will Nance, an analyst at Goldman Sachs Group Inc. wrote in a note. “We believe COIN’s stock will struggle to outperform in the near term.”

Coinbase falls by most on record after earnings miss, warning on trading volumes

The company reported lower-than-expected revenues yesterday, and warned trading volume and monthly transacting users in the second quarter is expected to be lower than in the first. A new risk disclosure in its filing triggered concerns among some users about the safety of their crypto assets held in custody by the company in the event of a bankruptcy.

Brian Armstrong, Coinbase’s chief executive officer, took to Twitter to clarify that there is “no risk of bankruptcy” and users’ funds are safe, while apologizing for not communicating proactively about the disclosure.

Bitcoin fell below $30,000 and touched its lowest level since June, while the TerraUSD stablecoin continued its downward spiral. Coinbase Chief Financial Officer Alesia Haas said yesterday that the company sees “bear-market conditions” but can still afford to make 2022 “an investment year.”

For more coverage

  • Coinbase Leads Selloff in Crypto Stocks as Bitcoin Wobbles
  • Bitcoin Touches 11-Month Low While TerraUSD Extends Declines
  • TerraUSD Backers Seek $1.5 Billion Rescue, Cashaa CEO Says

–With assistance from Claire Boston, Matt Turner and Olga Kharif.

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