Crypto Market Takes a Hit as Coinbase Shares Plummet
The cryptocurrency market felt the sting on Thursday as Coinbase shares took a nosedive, losing 12% of their value. This marked the largest single-day drop since March 2023, when the stock plummeted 14%. The broader market decline didn’t help, with other crypto-related stocks also taking a hit.
Robinhood Falls Hard
Robinhood, which reported weak earnings on Wednesday, tumbled 15% in a single day. Miners Mara Holdings and Riot Platforms weren’t spared either, sliding 8% and 11%, respectively. Even Bitcoin, often a key influencer of Coinbase’s stock price, slipped 2% after hovering below its all-time high earlier in the week.
Analysts Weigh In
Devin Ryan, an analyst at JMP Securities, views the current downturn as a temporary correction. He believes it presents an opportunity for long-term investors to get in on Coinbase and Robinhood. “There’s a lot happening in the next couple of months – the U.S. election, for instance – that will become the bigger story for the space,” Ryan said.
What’s Behind the Drop?
According to Owen Lau, an analyst at Oppenheimer, Thursday’s drop can be attributed to concerns about subdued volume persisting in the future and lower U.S. interest rates eating into Coinbase’s stablecoin revenue growth. Lau has a buy rating on Coinbase.
A Temporary Blip?
Despite the current turmoil, analysts remain optimistic about the long-term prospects of Coinbase and the crypto market as a whole. With the recent appreciation in crypto prices and volume, there’s potential for upward pressure on fourth-quarter revenue if the trend continues over the next two months. As Devin Ryan noted, “Nothing structural occurred here, but near-term, people will have to recalibrate a bit in their models for the blended take rate assumption.”
Leave a Reply