Why Coinbase Global Stock Couldn’t Maintain Its Pop Today
Coinbase globalit is (PIECE OF MONEY -0.60%) Monday got off to a flying start before investors started selling stocks again. Early on, the cryptocurrency exchange operator benefited from the rise of Bitcoin (BTC 2.55%) above a psychologically important price level; for the most part, however, these assets are still shaking as they tackle being stuck in the crypto winter.
On the first day of the trading week, Bitcoin broke above the $20,000 mark; by late afternoon, it had climbed almost 1% over the previous 24 hours.
Levels like $20,000 are not necessarily meaningful on their own, but because they are very round numbers that many investors find comforting. Over the weekend, investors had driven the price of Bitcoin down to near $19,500.
Other coins and tokens also performed relatively well on Monday. Ethereumalso one of the top assets traded through Coinbase, rose over 4%, while others like gimbal and shiba inus recorded more modest gains.
Coinbase is only an exchange operator and not a coin/token itself. While it can benefit from quick and instinctive reactions to events such as Bitcoin crossing the $20,000 river again, its ultimate gains are not immediate.
Additionally, one of Monday’s main movers for stocks and cryptocurrencies came from Federal Reserve Chairman Jerome Powell on Friday when he indicated that the monetary authority would continue to raise interest rates. interest. Investors probably had that in mind when they started reversing Coinbase’s gains on Monday.
Powell aims to fight inflation, but rising interest rates typically drain money from assets that many see as more speculative. And you can bet that if much of the investing world sees cryptocurrencies as speculative, that’s going to double for the stocks of companies that specialize in trading them.