Shaking crypto markets… Coin exchange stock price also going down
As the cryptocurrency market is going downhill, the stock price of coin exchanges is also not keeping up.
According to CoinMarketCap, a cryptocurrency information site, Bitcoin, the coin leader, has been trading between $28,000 and $30,000 since mid-May. The market price, which was between $46,000 and $47,000 at the beginning of this year, has fallen by nearly 40%. The situation is similar with Ethereum. It traded in the $3,700 range at the beginning of the year, then fell to around $2,000 in mid-May. In addition, as the market price of some coins, such as Luna, plummeted, investor sentiment in cryptocurrencies is rapidly freezing.
As the coin market took a downturn, the stock price of Coinbase, the largest coin exchange in the United States, was also struggling. Coinbase closed on May 12 at $58.5. It fell 76.7% from the beginning of the year to today. This is nearly three times the rate of decline of the Nasdaq Composite Index of 28.18% during the same period.
Performance is also poor. In its earnings release on May 10, Coinbase reported that it recorded $1.165 billion in net sales in the first quarter of this year. It decreased by 27% compared to the same period last year. Profitability also deteriorated. In the first quarter of last year, it posted an operating profit of $988 million, but in the first quarter of this year, it posted an operating loss of $554 million. As the popularity of cryptocurrencies waned, fewer investors using Coinbase played a decisive role in the deterioration of earnings. The number of monthly Coinbase users decreased from 11.4 million in the fourth quarter of last year to 9.2 million in the first quarter of this year. During the same period, the volume of transactions decreased from $547 billion to $309 billion.
Some analysts are of the opinion that a rebound in the short term will not be easy. Eunsoo Jung, an analyst at Meritz Securities, said, “Coinbase is investing in new businesses such as NFTs to diversify its business. Although there is potential in the long term, it is expected that short-term growth will be limited due to reduced liquidity.”
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