Competitors like Binance and have captured investors' attention, while crypto scams and hacks have grown more lucrative, leading federal lawmakers to push for more regulation around digital assets.Īll that activity, analysts said, has created an even greater divide between pro-crypto investors and skeptics. The crypto landscape is much broader and richer now than it was in April 2021 when Coinbase went public and its shares were trading at almost $400 a piece. Coinbase's future hinges on prices growing stronger, as do the futures of other major crypto platforms like FTX and Kraken, analysts said. "We expect them to gain even more market share after this, but no doubt we're in a difficult moment right now in the market," he said.Īs the crypto market goes, so goes CoinbaseĬoinbase is a real-time case study of what happens to a crypto company when the price of bitcoin and tokens fall, analysts say.
Once they do, they will likely use Coinbase, according to Ryan. Ryan believes the recent price slumps won't last forever and that investors will return to crypto. Ripple has fallen 61% to around 30 cents and ethereum is down nearly 70% to $1,140. Meanwhile, bitcoin's price, which peaked last November at around $68,000, is down 56% since the beginning of this year, trading at around $20,250 as of Wednesday. The price drop of the two benchmark stablecoins further eroded investors' faith in the crypto market. Individuals who had grown dependent on stablecoins like luna and terraUSD to shield their money from the wild swings typical of many cryptocurrencies, were stunned to see both those coins fall under $1 in May - something that was never supposed to happen. dollar also played a role in investors' departure from crypto in recent months. Stablecoins losing their pegs to the U.S. As investors sold off their digital assets, the price of crypto fell further. With the cost of everyday items like gas and groceries increasing, investors began pulling their money out of investments they deemed risky, including cryptocurrencies. The price of bitcoin, ethereum and other major tokens started falling this spring as rising inflation tightened its grip on the U.S. Not only is Coinbase seeing fewer transactions, but crypto prices have dropped to their lowest levels this year. "And even though they have a business model today that's based off transactions, they're building one of the most diversified businesses in the (crypto) industry." Crypto downturn is exacerbated by soaring inflation
"They are one of the best capitalized firms," Ryan told CBS MoneyWatch.
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