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Coinbase (COIN) Shares Reach All-Time Low as Crypto Stocks Continue to Get Crushed

Cryptocurrency Nov 22, 2022 05:00PM ET
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© Reuters Coinbase (COIN) Shares Reach All-Time Low as Crypto Stocks Continue to Get Crushed
 
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  • Coinbase’s stock reached a new all-time low of $40.62 on Monday.
  • The stock is down over 39% since the start of November and 80% from its all-time high of over $400.
  • Coinbase’s bonds are also at historic lows. Its 2031 bond has plummeted by 15% in November alone and is trading at around 50.5 cents on the dollar.
  • The falling price of COIN indicates investors aren’t willing to take the risk to invest in the crypto company amid the chaotic environment created by the FTX bankruptcy and upcoming regulatory scrutiny.

Crypto exchange Coinbase (NASDAQ:COIN) saw its stock plummet to a new all-time low of $40.62 on Monday. This comes amid the FTX blowup chaos and dwindling trust in centralized crypto exchanges.

The United States-based exchange’s stock is currently trading at around $42, which is about 80% down year to date, according to data from Yahoo! Finance. Coinbase traded at over $400 with an $85 billion market cap at the time of its IPO on the Nasdaq last year.

Coinbase’s share price has been heavily impacted by the fallout of its rival FTX, which filed for bankruptcy on November 11. In this month alone COIN has gone down over 39%, from $69 to around $42. This is even though the exchange has said it has no material exposure to FTX.

Coinbase’s bonds are also at historic lows. Its bond due 2031 dropped by 15% in November and is currently trading at 50.5 cents on the dollar, indicating that investors believe there’s a high chance the exchange will default on its bonds in the near future.

Coinbase has also seen a plunge in revenue as the broader crypto market continues to experience a significant downturn in prices. The exchange reported a 50% lower revenue in the third quarter of this year than in the same quarter last year, as well as a loss of $545 million. Coinbase cut its workforce by 18% in June, followed by another cut of 60 jobs in November.

Crypto Stocks Continue to Crash

But Coinbase isn’t the only crypto stock that’s been crashing. Bitcoin maximalist Michael Saylor’s MicroStrategy (MSTR) went to as low as $154 on Monday before going up to $162, which is 40% lower than at the beginning of the month.

MicroStrategy’s bonds have also taken a blow. The price of its 2028 bond dropped to a record low of 72.5 cents on the dollar on Monday, while yields climbed to 13.35%.

Silvergate (SI), one of the world’s leading banks specializing in crypto, has also seen its shares getting crushed since the start of November. SI is currently trading at around $26. This is almost 60% lower than what it was worth on November 1. While the bank said the FTX fiasco had no impact on it, the price action of its stock might indicate otherwise.

The broader crypto market has seen its value drop significantly. The total crypto market cap is currently at around $806 billion. This is down about 73% from its last November highs of over $3 trillion, according to data from CoinMarketCap. Bitcoin (BTC) and Ethereum (ETH) are both down around 77% from their respective all-time highs, while most altcoins are down 90-99%.

On the Flipside

  • Coinbase has said it has no material exposure to FTX.
  • Coinbase is one of the most highly regulated centralized crypto exchanges. This should calm both investors and users down.
  • The exchange has been around since 2013 and has survived multiple bear markets.

Why You Should Care

Coinbase is perhaps the most regulated centralized crypto exchange in the world. However, the plummeting price of its stock shows that investors aren’t willing to take the risk of investing in the business in the chaotic environment created by the FTX collapse.

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Coinbase, MicroStrategy Bonds Drop To Record Lows on FTX Bankruptcy

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Coinbase (COIN) Shares Reach All-Time Low as Crypto Stocks Continue to Get Crushed
 

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