Coinbase did not shine in the market for various reasons in 2022.
Coinbase, the company founded ten years ago by Brian Armstrong and Fred Ehrsam in San Francisco, has been listed under the title COIN on Wall Street since April 2021. The stock represents the most important stock exchange in the United States of America, and one of the largest in the world by market capitalization.
Coinbase is part of a small circle of publicly traded companies in the crypto world. The others are Block Inc. (formerly Square) and cryptocurrency mining companies Core Scientific and Riot Blockchain.
Bad news never comes alone, and aside from critical market issues and the Terra Luna, Three Arrows Capital, and FTX scandals, Coinbase did not shine in the market for various reasons.
The swap has been sued by the Supreme Court of the United States, in addition to already having two pending lawsuits that are heading to the final stage.
This and the downgrade of some investment banks caused the stock to fall on the stock market, reaching new lows.
Projections on Coinbase Shares (COIN) on the Stock Market
COIN is down 87% year to date to record a new low, since its inception in April last year.
On December 21, 2021, one share changed hands for $268.15 but, as we write, it is trading at $33 each.
The Bank of America has downgraded the exchange-related stock (Coinbase Global) from Buy to Neutral.
According to the analysts of the historic US investment bank, in a note, the choice was based on the reduction of risks in the short/medium term. They further added the following:
“We’re confident COIN won’t be another FTX (only $15 million in deposits on the FTX platform, according to a Coinbase blog post, and $5 billion in cash on hand as of September 30), but that doesn’t make them immune to broader spillovers. within the cryptocurrency ecosystem.”
Bank of America recognized, in the drastic drop in user confidence in the crypto world, the lack of clear regulation, as well as the danger of contagion from Extension FTP that is still around in the sector, as the main causes of the collapse.
Japanist Analysts Also Concerned with COIN
On the other side of the world, the rising sun was no different, and the title also generated discontent among Japanese analysts.
Mizuho is among the banks critical of COIN but has maintained its Neutral rating despite the sector’s daily volumes declining to the point of being below yearly averages by almost 40%, making it clear that:
“Consumers are exhausted and no longer interested in the asset class. After several months of stock losses against the 30 largest cryptocurrency exchanges, the FTX debacle has offered a bit of a respite for COIN, which has posted modest capital gains over the past week. But should investors rejoice? In our opinion, no, as other exchanges like Binance have gained significantly more shares.”
This is the comment in an official document of the Japanese institute, Mizuho.
By Audy Castaneda
