Coinbase has long been considered a major player in the cryptocurrency market. Last year, as the company expanded its workforce, adding institutional customers and issuing shares, crypto prices reached record highs. Now, in the depths of a crypto winter, Coinbase finds itself cutting a fifth of its workforce, losing retail volume and struggling with lows in its credit and stocks.
This week Crypto Biz dissects Goldman Sachs ’latest Coinbase downgrade and also looks at the latest developments around Three Arrows Capital.
Goldman Sachs lowers Coinbase shares to “sell”
After a promising debut on the Nasdaq stock exchange in April 2021, it was nothing more than a drop for Coinbase shares. The company that once had a fully diluted market capitalization of nearly $ 100 billion, was caught in a downward spiral in the middle of a cryptic winter. Recognizing the 80% decline in Coinbase shares, analysts at Goldman Sachs this week lowered the company to “sell,” which is basically a recommendation that investors liquidate their positions and deal with the stock for now. Goldman is not the only company to become a bearer on Coinbase. Earlier this month, credit rating agency Moody’s downgraded the firm to a Ba3 rating, which is considered a non-investment grade.
21Shares responds to bear market with crypto winter ETP
Swiss securities manager 21Shares is preparing for a crypto winter by launching a new product that allows investors to gain low-cost exposure to Bitcoin (BTC). Earlier this week, the company unveiled its exchange product 21Shares Bitcoin Core, also known as CBTC. What makes CBTC so unique is its tiny spending ratio of just 21 basis points, which is 44 basis points below the next cheapest product on the market. Basically, 21Shares wants you to continue to stack stocks – or buy shares in their ETP – during the market downturn. Unless you think Bitcoin is dead, the best time to accumulate is during bear markets.
A British Virgin Islands court reportedly orders liquidation of 3AC
The brain trust behind Three Arrows Capital, also known as 3AC, radio has been silent for the past few weeks amid reports that the hedge fund is bankrupt. On June 27, a court in the British Virgin Islands ordered 3AC to be liquidated, setting the stage for further volatility in the cryptocurrency market. Although details were scarce, the liquidation verdict came shortly after crypto exchange Voyager Digital handed 3AC a notice of default due to its failure to repay a massive loan that included 15,250 BTC and $ 350 million Coin (USDC). Curl up, ladies and gentlemen, the coming months will be ugly.
MicroStrategy collects 480 Bitcoin during market downturn
Concerns over Michael Saylor’s conviction about Bitcoin were laid this week after the CEO of MicroStrategy announced that his company had acquired an additional 480 BTC for $ 10 million. MicroStrategy now sits on a colossal 129,699 BTC valued at a combined $ 3.98-billion. Considering its average purchase price of $ 30,644 per BTC, the company has a net unrealized loss of about $ 1.4 billion linked to Bitcoin. With crypto winter just beginning, MicroStrategy could take years to break even on its assets. Saylor is as unwavering as ever, though.
MicroStrategy bought an additional 480 bitcoins for ~ $ 10.0 million at an average price of ~ $ 20,817 per #bitcoin. From 6/28/22 @MicroStrategy holds ~ 129,699 bitcoins acquired for ~ $ 3.98 billion at an average price of ~ $ 30,664 per bitcoin. $ MSTRhttps://t.co/leQYTXn817
– Michael Saylor⚡️ (@saylor) June 29, 2022
Don’t miss Where’s Bitcoin?
Bitcoin’s miserable build-up to $ 22,000 earlier this week had some investors excited that a breakout is coming soon. Well, that didn’t happen. Now, investors are wondering whether we will see $ 30,000 or a sub- $ 17,000 BTC first. In this week’s Market Report, I dissected the latest market developments with fellow analysts Jordan Finneseth, Benton Yuan and Marcel Pechman. You can catch the full iteration below.
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