Coinbase shares fall 20% as Bitcoin price falters

The year 2023 is off to a bumpy start for Coinbase. In just a few days, the American giant of crypto exchange platforms saw its shares plunge by almost 20%, swept away by the violent ups and downs of bitcoin.

Coinbase down 20% as Bitcoin falls

Coinbase hit a yearly high of $187 per share in late December, only to plunge to around $150 on January 4. This drop reflects the chaotic movements of bitcoin, whose price briefly rose above $46,000 on Tuesday before falling below $43,000 the next day.

The long-awaited approval of spot bitcoin ETFs by the SEC is generating much anticipation. These long-awaited index funds could trigger a massive influx of institutional capital into the crypto ecosystem.

While this approval seems to be only a matter of time for many experts, its timing continues to agitate the markets. When will the SEC finally give the green light? Before January 10, as predicted TD Cowen bank? Hard to say.

This climate of uncertainty weighs on the entire cryptocurrency sector, including Coinbase. Despite solid fundamentals with a market capitalization of 36 billion, the company is even experiencing sell-offs from investors like Ark Invest, which has liquidated $200 million worth of shares in recent weeks.

The sector in suspense

The SEC’s green light for spot Bitcoin ETFs would represent a watershed moment. By paving the way for index investments backed by bitcoin, it would greatly facilitate the allocation of this asset by the traditional institutional market. Giants like BlackRock are already ready to launch their own funds.

Thanks to its robust digital asset custody and exchange infrastructures, Coinbase has the means to establish itself as the reference platform for the entry of traditional investors into the crypto world.

Even though its shares are going through a rough patch with cryptocurrency prices, Coinbase remains a central name in this burgeoning ecosystem. In the long term, the growing adoption of digital currencies among traditional investors is seen as an important catalyst for growth.

Beneath its cyclical fluctuations therefore lies considerable structural growth potential, directly linked to the prospects for the democratization of bitcoin. Auspicious regulation by the SEC would kick off an unprecedented influx of traditional investors.

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