Last Updated on November 22, 2022 by Bitfinsider
Coinbase’s stock dropped by more than 8% after market closing on Monday, extending a decline that has sent the cryptocurrency exchange to its lowest position since it was first introduced to the market in April 2021. The decline occurs at a time when bitcoin’s
The decline remains, and investors are concerned about the possibility of a contagion effect following the stunning collapse of FTX earlier this month.
After going public nineteen months ago with a market cap of over $85 billion, Coinbase’s worth has dropped below the $10 billion barrier and it has lost more than a quarter of its value in the past four trading sessions. Coinbase went public with a market cap of over $85 billion.
Speculation has been rife over the well-being of FTX’s competing exchanges, which has resulted in widespread sell-offs across the industry. As a result of these sell-offs, some companies have temporarily halted trading, while others are preparing to file for bankruptcy. In a note that was published on Friday, analysts from Mizuho said that daily volumes in the industry are trending 30% to 40% lower than their average for the year.
“It’s difficult every time there is potential for client loss in our industry, and a lot of people are losing a lot of money as a consequence of FTX’s struggles,” said Armstrong. “There are a lot of individuals who are losing a lot of money as a result of FTX’s struggles.”
Even if Coinbase is not “another FTX,” Bank of America downgraded the cryptocurrency exchange platform on Friday, citing the “contagion risk” that the cryptocurrency market poses.
According to a piece that was published by Bank of America’s Jason Kupferberg, “That does not make them immune from the broader impact inside the crypto ecosystem.”
Before the fall of FTX, the market was in the midst of a crypto winter, which had caused the prices of bitcoin and ethereum to decrease.
tumbled and caused a number of businesses to declare bankruptcy as a result. A loss of $545 million was recorded for the third quarter by cryptocurrency exchange Coinbase earlier this month. This compares to the same period a year ago, when revenue fell by more than 50 percent. The cryptocurrency exchange laid off 18.1 percent of its workers in June.
The subsequent sell-off has been even more violent, with bitcoin dropping more than 3% on Monday to its lowest level in almost two years and ethereum dropping more than 6%. Both cryptocurrencies have reached their lowest levels since before the sell-off began. Over the past two weeks, the value of the cryptocurrency known as Solana has dropped by more than two thirds. This coin was promoted and supported by Sam Bankman-Fried, the founder of FTX.
When liquidity dried up, users requested withdrawals, and competitor exchange Binance tore up its nonbinding agreement to buy the company, FTX went from having a $32 billion valuation to filing for bankruptcy in a matter of days. FTX submitted their petition for protection under Chapter 11 on November 11th.
Two days before he was in an urgent need of a rescue, Bankman-Fried stated that the company’s assets were in “fine” condition. Since then, he has stated in tweets that he is attempting to retrieve deposits for the clients of the company.
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