KONSKIE, POLAND - November 03, 2018: Coinbase Pro cryptocurrency exchange logo on smartphone
Coinbase lost nine per cent in yesterday’s trading session. The drop came after the company’s latest financial report showed it had underperformed. According to the financial reports, the company announced a quarterly loss of $430 million. Coinbase also reported a 19 per cent monthly drop in the number of users visiting their platform.
Coinbase stock price has also been trending downwards as a result of the recent cryptocurrency crash that has resulted in almost all cryptocurrencies trading downwards. Since May 5, when the cryptocurrencies started to plunge, Coinbase has lost 50 per cent of its value. The year-to-date data also shows that Coinbase has lost 75 per cent of its value.
Hidden on the quarterly financial report was also a distressing update that indicated that its users might lose all the cryptocurrency stored in their accounts in the event of bankruptcy. Although the company’s CEO has already clarified that the company is not at risk of going bankrupt, the classification of their users’ digital assets as “general unsecured creditors” means they have no right to claim any of their assets from the exchange in bankruptcy proceedings was surprising. The clause would make all the cryptocurrencies stored on the platform inaccessible to their rightful users.
However, the doom and gloom of Coinbase have not extended to Wall Street. Ark Investment Management, which is run by Cathie Wood, continues to buy Coinbase and getting more inflows. Other Wall Street investors are also following suit. Wood’s firm has added 860,000 shares to their portfolio throughout the past few days. Although the decision has garnered criticism, Cathie Wood is doubling down on her strategy, a sign the prices may be going up in the near future.
Coinbase recently set a price low of $40 before a huge 60 per cent price surge that has seen it trading at over $60. The recent surge represents an opportunity for the stocks to continue with their current bullish trend. There is a high likelihood that the current price surge is a trend reversal.
Therefore, I expect the prices to trade above the $70 price level in the next few trading session. However, if the prices return and trade below the $55 price level, my bullish trade analysis will be invalidated. It will also mean the stock is still in a strong bearish move.
This post was last modified on %s = human-readable time difference 16:04