Coinbase’s Slump to All-Time Low Sends Market Cap Below Dogecoin
Shares of Coinbase (COIN) hit a fresh all-time low on Tuesday as the U.S.-based exchange continues to struggle with low trading volume amid falling crypto prices. Continuing declines for the stock have driven Coinbase’s market cap to less than $8 billion versus roughly $10 billion for meme favorite dogecoin (DOGE), which has suffered its own major tumble in 2022.
Though up marginally on the session at press time, COIN earlier dipped to as low as $34.35, with this recent decline adding to a 21% drop in November. Shares are down just shy of 86% year to date and off 91% from their all-time high hit shortly after going public in April 2021.
“Crypto traders remain skeptical about holding their cryptos on exchanges,” said Edward Moya, senior market analyst at foreign exchange Oanda. “Coinbase has an uphill battle as many traders fixate over moving their cryptos to cold storage, as surging yields keep pressure on this space, and over an uncertain regulatory path,” he added.
The bear market combined with recent scrutiny amid the collapse and potential fraudulent activities of crypto exchange FTX has led to significant declines in trading volumes – through which Coinbase generates much of its revenue. The movement of tokens to cold storage could exacerbate this trend as investors are less likely to transact as frequently if their coins are not on exchanges.
Online stock trading platform Robinhood (HOOD), for example, last month reported an 80% decline in crypto trading volume.
“The fact that dogecoin has a higher market cap than Coinbase shows you that there is still something wrong with the cryptoverse,” Moya said. While Coinbase may be “a decent long-term way to be on crypto,” Moya thinks shares could sink to the $30 level over the next few months.
