Risk appetite dominates the European stock market. The Stoxx 600 index hit a new high, despite concerns about an uncertain economic rebound and unsupported US stocks. A spike in commodity prices boosted miners.
The travel and leisure stock index scored a new record. Meanwhile, real estate stocks are rising after the German constitutional court’s ruling that Berlin’s rent cap is illegal.
The Stoxx 600 Index was up 0.3%, and the Real Estate, Mining, and Travel & Leisure stock indices were up around 1%.
Wall Street remains at highs
Wall Street started trading with rises. The Dow Jones and the S&P 500 reached new highs after Wednesday’s mixed close. The indices turned lower after hitting all-time intraday highs. The day was marked by JP Morgan, Goldman Sachs, and Wells Fargo results and especially by the successful debut of Coinbase.
The cryptocurrency broker launched on Nasdaq with an impressive 70% rise to $430 per share. The gain gave the company a capitalization of $100 billion.
However, Jerome Powell, the Federal Reserve president, tried to temper the market’s bullish mood. He commented that the US still faces possible downside risks, such as a delay in vaccines or a new increase in cases due to new variants of Covid-19.
Furthermore, the central banker notes that cryptocurrencies are highly speculative and are not in use as means of payment. Janet Yellen, the Secretary of the Treasury, shared the same view. In February, she stated that bitcoin is a highly speculative asset.
Coinbase deflates and closes with a capitalization of $86,000
Coinbase was released this Wednesday with the first price of $381. It was well above yesterday’s reference of $250 per share by the Nasdaq. Minutes later, it has continued to rise to $430 per share, exceeding the market capitalization of $100,000 million. However, at the close, it fell to $328.28 and a capitalization of 86,000 million.
Analysts warn investors in bitcoin to be prepared, but not discouraged, for much greater government scrutiny.
Coinbase ‘s value exploded last year along with BTC and ethereum. These are the leading cryptocurrencies traded on its platform.
Coinbase has opted for a direct listing rather than a traditional public offering for sale. So, instead of raising cash by selling new shares to a group of investors, the company allows current shareholders to start selling immediately at a price determined by the market.
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