Shares in cryptocurrency exchange Coinbase (COIN) showed their muscles in June with a performance of +50%.
The stock has been tested throughout 2022, but is posting excellent returns in the current year.
Meanwhile, Coinbase International, a Bermuda-based derivatives exchange, reported a $900m turnover in recent days.
Full details below.
Summary
Coin: Coinbase shares post 50% rally in June
Shares in Coinbase (COIN) have welcomed the news of BlackRock‘s call for a spot ETF on bitcoin, leading to a strong performance on the Nasdaq.
Along with the cryptocurrency market, which has added $150 billion to its capitalisation since the beginning of June, the exchange’s share price has also moved strongly.
Specifically, COIN has risen from $52 to $71 in the last 15 trading days, regaining all the points lost during the SEC‘s lawsuit against Coinbase.
The US regulator had accused Brian Armstrong and his team of offering investors “unauthorised sales of securities” and violating certain registration requirements, causing the exchange’s share price to plummet.
However, with a number of investment funds aggressively lobbying the SEC to offer cryptocurrency trading/investment services to their clients, Coinbase shares have risen from the ashes, with a +17% rally in the last five trading days alone.
Other names that have shown interest in the cryptocurrency industry alongside BlackRock include Fidelity, Bank of America, Morgan Stanley, WisdomTree and Invesco.
At the time of writing, Coinbase (COIN) shares are valued at $72.43 with a market capitalisation of around $17 billion.
The stock appears to be graphically resuming a bullish structure: if the $77 resistance is broken, it could easily attack the $100 psychological threshold.
Coinbase (COIN) shares recover some of the ground lost during 2022
Shares of cryptocurrency exchange Coinbase (COIN) are recovering some of the ground lost during 2022, with the capitulation of the stock and the entire cryptocurrency sector in general.
The year following the bull market of 2021 saw an intense bloodbath for many cryptocurrencies, including Coinbase shares, which lost around 85% of their value during this period.
The year 2023 seems to have started off on the right foot, with a doubling of share prices and, most importantly, increased institutional interest in a hitherto little-established market.
Despite an excellent recovery in the first two quarters of 2023, there are those who speculate that COIN’s recovery “could prove short-lived”.
These were the words of Mark Palmer of Berenberg Capital Markets, who suggested in a note to clients that he was not bullish on the stock.
In particular, the analyst cited the systemic risks of the crypto industry, which could lead to negative price action for Coinbase and its stock at a time of heightened regulatory tensions, with an estimated price target of $39.
If the SEC wins its case against Coinbase and the exchange is forced to withdraw its staking products, the company could see a significant drop in revenue, with obvious implications for the Nasdaq stock market.
On 4 July, the exchange will face this very issue in several US jurisdictions.
Coinbase International records 900 million volumes in eight days of derivatives trading
While speculators are betting on the future share price of Coinbase (COIN), the Bermuda-based international subsidiary is attracting a lot of derivatives trading volume.
Specifically, between the 21st and 28th of June, the marketplace recorded $900 million in transactions, all with just two contracts being traded.
In fact, BTC-perp and ETH-perp are the only two trading options offered by the exchange, which only launched in May but is already attracting an average of $100 million a day.
The data, extrapolated from The Block Research’s platform, makes it clear that Coinbase’s international market is off to a great start and could lead the company to increase some of its revenues, creating optimal conditions for COIN stock growth.
Despite the positive figures, Binance remains the leader in cryptocurrency derivatives trading, with a volume of $444 billion in June alone.
However, if institutional interest continues to grow at this rate in the coming months, the gap between Coinbase and Binance could narrow.
In addition, a resolution of the legal issues with the SEC could lead investors to trust the industry and positively stimulate the markets with much higher trading volumes.
Emmanuel Goh, product manager at Coinbase and former CEO of Skew, told The Block in an email:
“We are working to launch new features and additional products in the second half of the year and continue to grow our market share.”
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