The stock prices of various publicly traded companies and even that of cryptocurrency exchange Coinbase incurred a heavy decline on Friday morning.
A less-than-bullish recommendation from Wells Fargo and critical remarks from renowned short-seller Jim Chanos contributed to the over 8% decline in Coinbase stock.
The stock prices of several other publicly traded businesses that are close to the Bitcoin ecosystem, like MicroStrategy and Block Inc., also increased.
Block’s shares (SQ), which were selling at $164 at the beginning of the year, decreased by 5.37% on Thursday, closing the trading session at $55.90.
The price of MicroStrategy (MSTR), which was above $550 in January, dropped by 3.92% to close at $211.82 before climbing to $214 on Friday morning.
COIN instantly decreased from $64.65 to $60.76 at the opening of today. Since then, the stock has made some progress and is currently trading at about $62.
According to a CNBC report, Wells Fargo claimed that the San Francisco-based business now faces more competition from firms like FTX and Binance.
According to a research note by Wells Fargo analyst Jeff Cantwell, Coinbase will inevitably face downward pressure in the present bear market and will sell its COIN holdings for a fixed price of $57, which is over 83% less than its all-time high of $342 in April 2021.
Cantwell claims that this is a “reasonable value, in our view, for a high-quality company, but one that works in a sector with increasing price pressure, competition, and regulation, as well as an ambiguous road to sustainable profitability.”
Coinbase, which earns revenue through fees that users pay when they trade Bitcoin and other cryptocurrencies, reported a net loss of over $1 billion in the second quarter of 2020, marking the company’s second consecutive period of declining revenue. The exchange’s net income totaled 1.6 billion in Q2 2021.
According to CoinGecko, Bitcoin is currently trading mostly sideways with a loss of 0.2% over the last day to reach a price of $19,485.
