The punishing decline of Coinbase Global Inc.’s stock this year is set to bring the company’s market value lower than $10 billion for the first time since the cryptocurrency exchange went public last year.
Coinbase shares
COIN,
were off 9.8% in Monday afternoon trading, pulling the stock’s market capitalization down to about $9.3 billion on an intraday basis. That’s a far cry from the peak market capitalization of $76.9 billion that Coinbase achieved on Nov. 9, 2021, according to Dow Jones Market Data.
Monday’s action extends a rough year for Coinbase’s stock, which has lost about 84% thus far in 2022 amid what has been called a “crypto winter.” Coinbase’s woes align with a sharp plunge in the value of digital assets, though the stock has fared worse than bitcoin
BTCUSD,
which is down 66% on the year, and Ethereum
ETHUSD,
which is down 70%.
Coinbase also must contend with the negative attention brought on the crypto market by the recent implosion of fellow exchange FTX, which filed for bankruptcy earlier this month after pausing customer withdrawals.
‘This situation is unprecedented’: 10 crazy things detailed in FTX’s bankruptcy filing
Bank of America analyst Jason Kupferberg downgraded Coinbase’s stock to neutral from buy Friday, writing that while he was “confident” that Coinbase wasn’t “another FTX,” the fallout from that collapse could linger in the minds of regulators and crypto investors.
“With a large competitor eliminated, and with COIN reiterating its focus on regulatory compliance and the safety of customer assets, we think COIN may be able to gain market share over the long term,” Kupferberg wrote. “However, diminished confidence in the crypto ecosystem (especially among retail crypto users) is likely to dampen overall trading activity.”
Coinbase went public through a direct listing in April 2021 and ended its first day of trading as the most valuable U.S. exchange. Shares have declined 87.7% in the past year, while the S&P 500 index
SPX,
has declined 14.2%.
