Shares of crypto trading platform Coinbase Global were taking a hit Tuesday after cryptocurrencies slumped.
Bitcoin, the largest cryptocurrency by volume, dropped nearly 5% to $49,072.68. Ethereum was down 4.5%, Cardano declined 4.7%, and Terra was down 8.7%.
Bitcoin has had a volatile end of year after reaching record highs of $68,990.90 in November. Since then, the currency has lost nearly 30%, hovering around the $50,000 mark. Rising interest rates, tighter liquidity in financial markets, and shifting regulatory stances may be making crypto investors skittish.
Coinbase (ticker: COIN ) was down 5.2% to $265.66 Tuesday. The shares were trading nearly 20% below their April stock market debut.
Coinbase’s third-quarter revenue and profits missed Wall Street’s expectations. The crypto brokerage blamed lower volatility for the shortfall, as trading volume and transaction fee revenue correlates with higher volatility. If volume declines and people are less active, Coinbase’s fees take a hit.
Regardless, many analysts are still looking toward digital assets as a future investment opportunity. Coinbase was one of Oppenheimer’s top picks for 2022 last week, with analysts rating the stock at Outperform with a $444 price target.
“For institutional investors who are interested in getting exposure to digital assets, we believe COIN is well-positioned to benefit from it,” analyst Owen Lau said. “More importantly, we are still in the early innings of this development, and we believe many investors are still on the sidelines.”
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