Coinbase shares have rallied over the past seven days but are still down more than 50% over the past 12 months.
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After a crypto winter that has lasted for months, shares of crypto exchange Coinbase have gotten a break this year — and their rally over the past several days has put the stock on pace for its longest winning streak on record.
Coinbase Global Inc.
COIN,
shares were up 8.1% on Tuesday, trading at around $81.23. The stock has risen for the past seven days and was up around 50% over that time. It began trading in April of 2021.
The rebound for Coinbase has come in tandem with a rebound in the price of Bitcoin
BTCUSD,
this year. But it also follows last year’s larger retreat from crypto trading, as well as steep job cuts at the company. Coinbase shares are still down 53.7% over the past 12 months.
The downfall of rival exchange FTX last year raised questions about fraud, security, regulations and the durability of the crypto infrastructure. That was followed by the implosion earlier this month of crypto-friendly banks Silvergate Capital Corp.
SI,
and Signature Bank of New York.
The downfall of those two banks and of Silicon Valley Bank was “jeopardizing blockchain development” in the U.S., Oppenheimer analyst Owen Lau said in a research note last week. He lowered his revenue estimate on Coinbase as a result.
“The spectacular fallout of [Silicon Valley Bank], the voluntary liquidation of [Silvergate], and the abrupt shutdown of [Signature Bank of New York] have seriously impacted not only the ecosystem of digital assets but also the ecosystem of Silicon Valley,” he said.
The demise of those banks had “already broken” some key aspects of the digital-asset infrastructure, he said, namely Signet, a digital-payments platform at Signature, and SEN, Silvergate’s defunct exchange network.
The Wall Street Journal on Monday reported that Coinbase had stopped its support for Signet while the exchange seeks an alternative and waits for more information about Signet’s fate. Coinbase this month announced that it had stopped accepting or initiating payments to or from Silvergate just before Silvergate stopped running SEN.
Lau added: “We expect liquidity and trading volume to decrease until someone fills the void.”
