Crypto exchange Coinbase plunged to a $32.65 all-time low as the S&P 500 and the Nasdaq Composite also slipped up.
Coinbase (NASDAQ: COIN) recently fell 8% to an all-time low of $32.65 following a sluggish trading day. The slow session was also accompanied by slow movement in the S&P 500 and Nasdaq Composite during the holiday weekend.
The low trading volume seen in the markets was likely a result of investors taking a break to mark the festivities. In addition to Coinbase’s all-time low, other crypto-related stocks also plunged during the holiday weekend. These include digital asset tech-driven investment firm Galaxy Digital and business intelligence and cloud-based service provider MicroStrategy (NASDAQ: MSTR).
Meanwhile, the lull in crypto market activities also extended to the digital currencies themselves, with Bitcoin (BTC) shedding 1.1%. In addition, Ether (ETH) also declined over the last 24 hours by 0.7%.
S&P, Nasdaq Impacted Same Coinbase All-time-Low Causative Factors
The major indexes also recently closed lower due to interest rate pressure from rising US Treasury yields. Although the S&P and Nasdaq slumped to begin the holiday-shortened week, the Dow retained nominal gains due to value stocks. Weighing in on this development, Carson Group chief market strategist Ryan Detrick explained:
“Higher (Treasury) yields are pressuring growth stocks, and on the other hand industrials, utilities and energy are outperforming. Money’s flowing out of the growth areas and working its way to the value side of things, which is a microcosm of what we’ve seen all year.”
Detrick also added that “it’s important to remember that there are other groups that can take up the baton when the high-flyers come back to earth.”
The rise in Treasury yields piled pressure on interest rate-sensitive growth stocks, which has been a recurring pattern this year. This year, growth stocks sank at a steeper rate of more than 30% compared with value’s 7.5% decline over the same period. Furthermore, all three major indexes are on course for their most significant annual loss in fourteen years. Commenting on the relatively poor performance in the capital markets, Detrick observed:
“It was a bad year for stocks, but a worse year for bonds. That’s extremely rare. It’s an unfortunate reminder that the markets can sometimes surprise.”
Coinbase Optimistic on 2023 Prospects
Nonetheless, despite the rockiness that characterized this year, Coinbase remains optimistic about 2023. According to the leading American crypto exchange, the crypto ecosystem evolution is putting blockchain-powered components “front and center.” Efforts include tokenization, decentralized finance (DeFi), and Web3. In addition, Coinbase also cited an increased variety of use cases in non-fungible tokens (NFTs) outside of art as extra impetus.
Coinbase Secures VASP License
In other Coinbase-related news, the prominent exchange recently received a VASP license from the Central Bank of Ireland. According to reports, the license covers two Coinbase subsidiaries, namely Coinbase Europe Limited and Coinbase Custody International Limited.
The Irish regulators reviewed Coinbase’s anti-terrorism and money laundering process as part of the approval process. Following the approval, the American exchange appointed a new country director Cormac Dinan to helm its affairs in Ireland.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
