Bearish Bitcoin leads to tumble in crypto stocks, with Coinbase taking a hit News ▸ US ▸ Coinbase ▸ Bitcoin ▸ Investments
Bearish Bitcoin leads to tumble in crypto stocks, with Coinbase taking a hit
JPMorgan downgraded Coinbase shares to underweight because of the current market conditions.
2 min read
Updated: Jan. 23, 2024 at 2:59 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The shares of several U.S.-listed crypto companies experienced substantial declines in their values due to the significant market downturn today, Jan. 23.
Earlier today, Bitcoin’s price retraced more of the gains it made in anticipation of the U.S.-based spot exchange-traded fund (ETF) launches in the U.S. The flagship digital asset dropped below $39,000, marking its lowest value since early December, according to CryptoSlate’s data.
According to Yahoo Finance data, this market movement triggered a 5% decline in crypto exchange Coinbase shares and a 4% dip in business intelligence firm MicroStrategy’s shares during pre-market trading.
JPMorgan analysts downgraded Coinbase’s stock from Neutral to Underweight in response to the crypto market pressure and potential revenue shifts away from Coinbase due to newly launched ETFs.
The analysts explained that the exchange’s stock is valued “on a normalized earnings power at $80/share, suggesting a downside of 35% in its shares.”
Despite a remarkable 2023 performance (COIN +390% vs. SP500 +26%), the analysts foresee challenges for Coinbase this year.
“Cryptocurrency prices are already under pressure; with Bitcoin falling below $40k as of the writing of this note, we see greater potential for cryptocurrency ETF enthusiasm to further deflate, driving with it lower token prices, lower trading volume, and lower ancillary revenue opportunities for firms like Coinbase,” JPMorgan added.
Crypto miners’ stock decline
Bitcoin miners were not immune to the market decline as their stock value also fell.
Marathon Digital Holdings, a Nasdaq-listed bitcoin miner, witnessed a 3.19% pre-market decline, bringing its price to approximately $16.08.
Riot Platforms, another Bitcoin miner, saw a 2.45% decrease to $10.34, while Canada-based miner Hut 8 Corp experienced a 2.05% dip. In addition, CleanSpark recorded a 2.82% decline in pre-market prices.
Julio Moreno, CryptoQuant’s head of research, noted that BTC miners are currently feeling the pain from the flagship digital asset’s lower prices and fees.
“[BTC] prices are down 18% since ETF approval, total daily fees down 87% since mid-December (in BTC terms), and overall daily revenue down 38% also since mid-December (in USD terms),” Moreno explained.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Marathon Digital
Marathon Digital Holdings is a digital asset technology company that mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets.
MicroStrategy
MicroStrategy (Nasdaq: MSTR) is a worldwide leader in enterprise analytics and mobility software.
CleanSpark
CleanSpark (NASDAQ: CLSK) is a sustainable bitcoin mining and energy technology company that is incorporated in Nevada.
Hut 8
Hut 8 is a digital asset miner with two digital asset mining sites located in Southern Alberta and a third site in North Bay, Ontario, Canada.
Riot Platforms
Riot Platforms is a bitcoin mining company, supporting the Bitcoin blockchain through rapidly expanding industrial-scale mining focused in the United States.
Michael Saylor is the Executive Chairman, founder, and principal shareholder of MicroStrategy.