Due to their extensive exposure to asset price fluctuations, bitcoin companies have seen particularly severe losses during the bear market. The bulk of them have made notable layoffs in order to be able to conduct their business in peace. This is especially true for Coinbase, whose stock price has fallen at the same rate as cryptocurrency prices. Goldman Sachs analysts have also downgraded the shares of the American exchange as a result of this sequence of events. Explanations.
Shares have decreased by 84% since November 2021.
Following its IPO in April 2021, Coinbase experienced a surge in stock value that reached a high of $381. As a result, the exchange at the time benefited from a market capitalisation of $100 billion. Due to the steep decline in stock prices, which have dropped by 84 percent since November 2021, this is now under $15 billion. The primary cause of this decline is the market-wide decline in cryptocurrency prices, which has had a significant impact on the exchange’s operations. In fact, Coinbase was compelled to fire nearly a fifth of its employees and even stopped hiring new employees.
According to analyst William Nance, Goldman Sachs was forced to lower the exchange’s shares from that point forward. The latter said that if retail activity declines, Coinbase “would need to make substantial spending cuts to prevent the consequent cash burn.” Similar to Goldman Sachs, Moody’s lowered Coinbase’s rating from Ba2 to Ba3. She noted that the exchange’s declining trade volumes damaged its rating because the exchange’s business model is dependent on those volumes.
Advanced Trade replaces Coinbase Pro.
Coinbase has announced the closure of its Coinbase Pro trading platform, subject to the cryptocurrency markets’ recovery. Advanced Trade, a more extensive services module built into the exchange’s website, will now take its place. This new option stands out for its more thorough technical assessments, an improved order flow, and funds given by the US Federal Deposit Insurance Corporation. In the upcoming months, it should be integrated with the Coinbase mobile app.
