Shares of publicly traded, crypto-focused companies extend their recent slide, reflecting nervousness about the direction the broader market is headed.
The largest US exchange, Coinbase Global Inc.
PIECE OF MONEY -11.22%
fell 79% from its all-time high in November 2021 when bitcoin hit all-time highs of $67,802.30. Shares of the company are down 34% so far this month.
Coinbase COIN based in California -11.22%
is expected to release earnings on Tuesday after the market closes. Analysts are expecting a loss of a penny a share in the first quarter, according to FactSet, from $3.05 a year ago.
The company made its public debut on April 14, 2021, and the stock price reached $429.54 in the first few minutes of trading and ended the session at $328.28. The stock has fallen 77% since then.
Coinbase’s market capitalization fell to $17.27 billion on Tuesday, from around $32 billion in mid-April. Since the company derives almost all of its revenue from transaction fees, declining trading volumes have hurt its revenue recently.
Other crypto stocks also saw steep declines. Silvergate Capital Corp.
has fallen 39% so far this year, Marathon Digital Holdings Inc.
slipped 62%, Riot Blockchain Inc.
slipped 65% and TeraWulf Inc.,
a bitcoin mining company, is down 80%.
Last week, the Federal Reserve raised interest rates by half a percentage point, the biggest rise in more than two decades, prompting investors to further shed shares of speculative companies. The prospect of increases of more than half a percentage point sparked declines in stocks and bonds, with fund managers nervous about the end of the easy money era when bets risky prospered.
Crypto stocks track cryptocurrency prices closely, often falling or rising in tandem. This year, however, crypto stocks are faring worse than digital currencies. Bitcoin is down 45% this year, while Ether has slipped around 40%. On Tuesday, bitcoin prices rose 0.4% to $31,075.70 from Monday’s levels as of 5 p.m. ET.
The third-largest stablecoin, TerraUSD, which is expected to hold its value at $1, fell as low as 69 cents on Monday, prompting a flood of investors to sell their holdings.
This year’s rout also punished large-cap tech stocks. netflix Inc.,
Metaplatforms related to Facebook Inc.
and Amazon.com Inc.
are all down by more than a third this year. Meanwhile, the tech-focused Nasdaq Composite fell 25%.
Sentiment on non-fungible tokens, or NFTs, also cooled, signaling a widespread unwinding of risky bets.
For now, investors are awaiting consumer price inflation data due out on Wednesday. If the data suggests inflation has peaked, analysts say that could potentially influence the Fed’s aggressive tightening plan.
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