Coinbase Stock Extends Slide, Set For Record Low, Amid FTX Collapse

Coinbase Global  (COIN) – Get Free Report shares are set to open at their lowest levels on record Monday as the impact of FTX’s multi-billion bankruptcy continues to echo through cryptocurrency markets around the world.

FTX, the bankrupt crypto exchange once run by Sam Bankman-Fried, owes its top 50 creditors more than $3 billion, court papers indicated this weekend, with new administrator John J. Ray planning to launch a “strategic review” of the various businesses in order to determine which can be salvaged, or possibly sold, and which can be restructured.

Any forced selling of FTX’s assets, which at this time remain undefined, could trigger a further pullback in bitcoin prices, which are down more than 72% from their early November 2021 peak. 

Concerns over the fate of stablecoins such as Tether, which claim one-to-one backing by U.S. dollar assets, as well as the pausing of withdraws at Genesis Global, the partner to the cryptocurrency platform run by Tyler and Cameron Winklevoss, have added to investor fears of a prolonged market decline. 

“FTX’s sudden collapse into bankruptcy is a devastating blow to the crypto sector and an overall negative for Coinbase,” said D.A. Davidson analyst Christopher Brendler. “Near term, we’re bracing for FTX exposures that cause more failures, but we’re most concerned about potential permanent damage to investor appetite.”

“Fortunately, Coinbase isn’t directly exposed and should benefit from share gains and pricing power,” said Brendler, who carries a ‘buy’ rating with a reduced $70 price target on the stock. “While a kneejerk regulatory response is another risk, clarity could help investor demand.”

Coinbase Global shares were marked 6.4% lower in pre-market trading to indicate an opening bell price of $42.37 each, the lowest level for the San Francisco-based group since it went public at $381 each in April of last year.

Bitcoin prices were marked 1.45% lower in early New York trading Monday to change hands at $16,016.90 each, a move that extends their decline to around 45.5% over the past six months. 

Coinbase said earlier…

..

Read More

Recommended For You

Leave a Reply

Your email address will not be published. Required fields are marked *