Bitcoin shares prices are bouncing. On Tuesday, Coinbase fell by 2% and traded around $218, close to its all-time low of about $429.55.
Coinbase went public two months ago via a direct listing of the stock. Coinbase shares are lower than 36% from the closing price on the first day of trading. Bitcoin suffered over a 50% drop during this time frame.
Some Coinbase bulls complained that the company might be immune from the price volatility of cryptos like ethereum, bitcoin, and dogecoin, which turned out not to be the case.
Coinbase is tied to bitcoin, even if users still conduct transactions without considering the prices of cryptos go up or down. However, when prices are falling, Coinbase generates less revenue.
Kulper said that other revenue sources, like custody services, are based on a fee of the stored assets.
Of course, all the volatility might create a good opportunity for brave people to buy the dips.
Last week, Canaccord Genuity analyst Joseph Vafi said in a report that Coinbase would be a primary beneficiary if the future in financial services becomes tied to the blockchain.
Changes in The Crypto Market
However, Coinbase is not the only crypto stock pulling a Tom Petty lately.
Software company MicroStrategy owns a significant share of bitcoin on its balance sheet, which dropped by 10% on Monday.
This week, Shares of bitcoin miners Marathon Digital Holdings, Riot Blockchain, and Canaan also plunged.
The mining companies seem to be subject to the daily fluctuations in terms of the bitcoin prices.
Besides this, the co-manager said that his company sold shares to buy more Crypto and Coinbase.
Co-portfolio manager of the Amplify Transformational Data Sharing Michael Venuto said that the stocks would be volatile as Crypto is a new asset. He added that they increased their exposure to Coinbase after trading volume increased.