Coinbase, the largest US cryptocurrency exchange, went public on Wednesday. But its stock price is down today.
1. The overall cryptocurrency market is down today.
Bitcoin, the world’s largest cryptocurrency by market value, is down about 5% today. And Ethereum, the second largest cryptocurrency by market value, is down about 10% today.
When the overall cryptocurrency market is down, it’s not surprising that Coinbase’s stock is down as well.
2. Some investors are selling Coinbase stock to cash in on its recent run-up.
Coinbase’s stock price has been on a tear lately, more than doubling since it first started trading on the NAsdaq on April 14. So it’s not surprising that some investors are selling Coinbase stock to take profits.
3. There’s concern that cryptocurrencies could be facing more regulation in the US.
The US Securities and Exchange Commission (SEC) has been cracking down on cryptocurrency companies in recent months. And there’s concern that more regulation could be coming for the industry in the US.
That’s one reason why the overall cryptocurrency market is down today.
4. Coinbase is still loss-making and its revenue growth is slowing.
For all of 2020, Coinbase reported a net loss of $30 million. And its revenue growth is slowing: In Q1 2021, Coinbase reported revenue of $1.
8 billion, up just 13% from Q4 2020. That’s much slower than the triple-digit revenue growth Coinbase was reporting a few quarters ago.