Coinbase Stock Price Falls to New All-Time Low

•The stock price of crypto exchange Coinbase hit a new all-time low of $40.61 Monday, amid a market downturn.

• Bitcoin and Ethereum—the two largest cryptocurrencies by market cap—also fell, with Bitcoin declining 5.5% to $15,665 and Ethereum falling 8.2% in a day to $1,081, according to CoinGecko data.

• Coinbase has used the collapse of FTX to market itself as a more trustworthy and compliant exchange, but that hasn’t stopped the company’s shares from tanking.

• The exchange’s struggles in recent months may be an example of the broader “crypto contagion” thesis—which posits that the fall of one company will cause a domino or ripple effect that damages the whole industry.—or simply due to poor performance amid wider market declines.

The stock price of crypto exchange Coinbase hit a new all-time low of $40.61 Monday, amid a market downturn. Bitcoin and Ethereum—the two largest cryptocurrencies by market cap—also fell, with Bitcoin declining 5.5% to $15,665 and Ethereum falling 8.2% in a day to $1,081, according to CoinGecko data.

Coinbase has used the collapse of FTX to market itself as a more trustworthy and compliant exchange, but that hasn’t stopped the company’s shares from tanking. The exchange’s struggles in recent months may be an example of the broader “crypto contagion” thesis—which posits that the fall of one company will cause a domino or ripple effect that damages the whole industry.—or simply due to poor performance amid wider market declines.

What is Crypto Contagion?

The crypto contagion thesis posits that the fall of one crypto company will have a domino or ripple effect that damages the whole industry. This theory has been floating around since the market crash of 2018, when Bitcoin fell from its all-time high of $19,783 to just $3,122 in under a year. At the time, many thought that the crash was an isolated event—but now, some are wondering if history is repeating itself.

The current market downturn can be attributed to several factors: concerns about inflation, stricter regulation from China, and a general sense of market fatigue after last year’s massive bull run. The major pain point in crypto at the moment is the traumatic failure of FTX and the consequences of that failure. With the failure of FTX being caused by dishonest leadership and scandal the outlook on crypto at the moment is not as bright as it use to be. Whatever the reason, it’s clear that Coinbase is feeling the effects. The question now is whether or not the rest of the industry will follow suit. As the contagion continues to grow more and more companies are feeling the effects with many crypto companies being forced into bankruptcy as well

Coinbase’s troubles are yet another example of how volatile and unpredictable the cryptocurrency markets can be. If you’re thinking about investing in Bitcoin or any other digital asset, it’s important to do your research and understand the risks involved. The truth is, even though cryptocurrencies have been around for over a decade now, they’re still in their infancy—and no one really knows where they’ll go from here. So if you do choose to invest, make sure you only put in what you can afford to lose.

The situation now means that many are not as confident as they used to be with crypto and the crypto contagion thesis is not as far-fetched as some would have thought. The future of cryptocurrency remains uncertain, but it’s important to be aware of the potential risks and do your own research before investing in digital assets. As with any other investment, it’s best to tread carefully and stay informed about the current market. There will indeed be more regulation coming to the space now that FTX has fallen and Sam Bankman Fried has been found to be a fraud. Companies like Coinbase have a long road ahead of them no matter the pro-regulatory stance they currently take.

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