Crypto Stocks do worse than Crypto currencies

Currency exchange and shovels have recently become worse than their own crypto currencies.

Hundreds of millions of people are currently trading bitcoin, ether and other digital assets on the cryptocurrency market. Bitcoin is down 11% this year. Ether decreased by 16%. Data from CoinMarketCap show that the overall crypto market has fallen by 19% since Monday, although prices are lower year on year.

But shares of publicly traded crypto-currency companies are doing worse, falling by 60% this year, according to FactSet..

The largest US exchange Coinbase COIN 16.02%

Global Inc has decreased by 40% so far. Silvergate Capital Corporation.

SI 19.11%

Downloaded 11% Marathon Digital MARA 12.22%

Holdings decreased 35% Riot Blockchain Inc.

RIOT 9.03%

Downloaded 33% Terawalf Ink.,

WULF 8.36%

In Easton, Md. The bitcoin-mining company is down 61%.

As Bitcoin went on record in November, the total market capitalization of crypto trading companies fell to about $ 60 billion. More than half of the slides – about $ 20 billion – came from Coinbase alone.

On Monday, Coinbase closed at $ 145.16, the lowest price since its official launch in April 2021. It traded up at $ 151.27 on Tuesday.

Nicolaus Colas, founder of Data Trek Research, said the difference between crypto currencies and crypto companies should not be surprising. He said there is always a difference between the value of the property and the companies that build businesses around the property.

Bitcoin and its peers, according to Mr. Colas, are driven by consumer demand, but companies such as Coinbase, Silvergate and Marathon gain value by selling their products to customers.

Similar volatility is seen in the oil and gold markets as well as in other commodities.

Coinbase, the largest U.S. cryptocurrency company with a market capitalization of $ 33 billion, has seen a sharp decline in trading volume. For the top 10 exchanges, trading volume decreased by 40% from the fourth quarter to the first quarter, according to research firm CoinGecko.

WSJ Dion Rabouin explains why Wall Street should now invest heavily in crypto and what it means for the new asset class and its future. Photo courtesy of: Elizabeth Semlov

Coinbase derives all revenue from transaction fees. Coinbase traded an average of $ 4 billion a day in January, according to analyst company Nomics. So far this month, it has reached $ 2.6 billion a day.

Coinbase also said it plans to invest heavily in the business by 2022 and that if the trade continues to decline, it could put the company in bankruptcy.

Analysts reduced Coinbase’s first quarter earnings from $ 1.89 to $ 2 cents in November, analysts on FactSet said.

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According to BTIG analyst Mark Palmer, cryptocurrency shares have been partially separated from the main crypto market during the fall of Fintech Tech.

Technology reserves are declining after the Federal Reserve and other central banks announced interest rates. Higher rates make risky investments relatively less attractive. Verify Holdings Inc.

Decreased by 63% this year, PayPal Holdings Inc. Decreased by 45% and Lemonat Ink by 44%.

Crypto mining companies’ stock prices — of course, crypto-trading companies that keep the network alive – are volatile because shareholders are mostly private investors, says DA Davidson analyst analyst Chris Brendler.

“Miners are different animals in many ways,” he said.

Miners do nothing but run hardware that handles crypto transactions, especially bitcoin. The category does not attract much institutional investment. He said the low number of long-term owners could lead to a boom-and-pen business.

Mining hardware is expensive and must be worked 24 hours a day, seven days a week. Investors are concerned about how to finance the acquisition of new instruments by reducing stock prices and declining crypto profits.

Write to Paul Vigna at [email protected]

Corrections and magnifiers
TeraWulf Inc. Founded by Easton, Md. He erroneously claimed that the original edition of this article was in Minnesota. (Edited April 19)

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