The price of Bitcoin has plummeted. The same goes for the stock of the top cryptocurrency trading company Coinbase Global.
Coinbase fell 2% on Tuesday and is currently trading at about $217. It is not far from the historical low and far from the peak price of about $429.50.
It has only been two months since Coinbase went public through its direct listing. However, its share price fell more than 35% from its closing price on the first day of listing. During this period, Bitcoin has fallen by more than 50%.
Coinbase bulls believe that the price fluctuations of personal cryptocurrencies will have no effect on the company. However, it didn’t really turn out to be true.
Coinbase is still closely related to the fate of Bitcoin. When prices fall, Coinbase generates less revenue.
90% of Coinbase’s revenue comes from transaction fees, which are evaluated as a percentage of transactions.
Its other sources of income, such as custodial services, are charged based on a portion of the stored assets. Therefore, they are related to the price of encrypted assets.
However, all volatility may create a good opportunity for those who dare to buy on dips.
Coinbase is not the only cryptocurrency-related stock that falls among market movement
MicroStrategy is a software company that owns a large amount of Bitcoin on the company’s balance sheet. The company plunged 11% on Tuesday after falling 10% on Monday.
Bitcoin miners Riot Blockchain, Marathon Digital Holdings, and Chinese Bitcoin mining equipment company Canaan also all plummeted this week.
Mining companies are often more susceptible to daily fluctuations in Bitcoin prices.
For example, the co-manager of a crypto-related fund stated that his company had sold several mining stocks to buy more Coinbase.