Will Coinbase bounce back after massive crypto sell-off?
Cryptocurrency platform Coinbase recovered mildly from fresh lows; investors had rushed for the exits when Bitcoin swung about US$10,000.
- Coinbase Global Inc (All Sessions) (Nasdaq: COIN) share price rises to US$233.40 per share
- The exchange suffered an outage amid cryptocurrencies’ price volatility
- Analysts on average targeted COIN’s stock to reach US$405.15
- Buy and sell Coinbase stocks with an IG account
Coinbase share price: What’s the latest?
Shares of Coinbase, which operates the largest US cryptocurrency exchange, bounced back slightly on Thursday, finishing 3.8% higher at US$233.40.
They had tumbled 5.9% to their lowest-ever close of US$224.80 on Wednesday, hammered by frantic selling in major digital currencies such as Bitcoin (BTC) and Ether. COIN shares had fallen nearly 13% earlier on Wednesday to a record low of US$208.
Amid the wild crypto price moves, the crypto trading platform said it was facing ‘intermittent downtime’, but later announced it had identified and fixed the issue. Its peer Binance, the world’s largest cryptocurrency exchange, likewise cited network congestion and temporarily disabled Ethereum withdrawals.
Although exchanges are the backbone of the digital-asset world, they frequently experience service outages when traffic on blockchain networks gets too high. This calls into question their readiness to serve a quickly growing market, Bloomberg said.
Out of 13 analysts, nine recommended ‘buy’ on COIN shares and four rated it ‘hold’, with none giving ‘sell’ calls as of Thursday. Their average 12-month target price was US$405.15, according to Bloomberg data.
This week, ‘outperform’ or ‘overweight’ calls came from Wedbush, Oppenheimer & Co, and Atlantic Equities, with targets of US$275, US$434, and US$460 respectively. Meanwhile, research teams from Bernstein and Keefe, Bruyette & Woods recommended ‘market perform’ on Coinbase, targeting US$250 and US$325 respectively.
Cryptocurrencies plunge nearly US$1 trillion
Bitcoin, the biggest and best-known cryptocurrency, slid to a low of US$30,066 on Wednesday. The coin was trading 7.2% lower at US$38,286 as of 10:35SGT on Thursday, and has fallen about 41% from its record high of US$64,895 reached on 14 April 2021.
At one point on Wednesday, almost US$1 trillion was wiped off the market capitalisation of the entire cryptocurrency sector, Reuters reported. Plumb Balanced Fund portfolio manager Tom Plumb noted: ‘It’s not just a small segment of the world that is affected by cryptocurrencies; it’s now mainstream.’
Also weighing on sentiment was China’s move on Tuesday to ban financial and payment institutions from providing cryptocurrency services, and also the country’s warning to investors against speculative crypto trading.
Some market watchers predicted more losses ahead, noting that Bitcoin’s fall below US$40,000 was a breach of a key technical barrier, Reuters reported.
During the crypto price slide on Wednesday, Tesla Inc CEO Elon Musk tweeted an emoji, suggesting the Bitcoin position is worth holding on to. Musk’s tweet ‘definitely’ helped the digital token’s recovery, said Toroso Investments chief investment officer Mike Venuto.
Last week, cryptocurrency price declines erupted after Musk’s comments on Twitter that the electric-car maker has suspended vehicle purchases using BTC. Coinbase shares also took a beating from the Bitcoin sell-off at that time.
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