With Bitcoin hitting a new yearly low, Coinbase (COIN) stock also fell to a new all-time low. Since its peak, COIN has lost over 85% in value. On top of that, institutional investors are starting to open short positions against Bitcoin and Ethereum. Is this the start of crypto surrender?
On November 21, COIN stock price fell to nearly $40. Bitcoin’s price crash, this time to a new yearly low below $16,000, has once again wreaked havoc across the entire crypto industry.
According to MarketWatch, COIN prices recovered slightly and held at around $41.36 after the market closed.
However, the stock is now down a staggering 88.6% from its all-time high. Exactly one year ago, Coinbase shares, along with the crypto market, peaked at $357. COIN was only briefly higher on the day of its IPO in April 2021.
Coinbase’s enterprise value is falling
As MarketWatch reported, the decline in Coinbase shares took the company’s market value below $10 billion for the first time since its IPO. Previously, the crypto company Highs of up to $76.9 billion reached, they say.
According to Bloomberg, Coinbase currently has 14 buy, 12 hold, and six sell ratings. On Nov. 18, Bank of America downgraded the company’s stock to neutral long.
According to CNN, the largest COIN holders are The Vanguard Group, Ark Investment Management and Blackrock Fund Advisors.
In the third quarter, Coinbase saw its revenue drop 50% compared to the same period in 2021. Up to 85% of its income the company benefits from its above-average profitability transaction fees.
But Coinbase wasn’t the only crypto company to see a price drop: Mining companies are even more affected. Yesterday, Marathon Digital Holdings was down 17%, Riot Blockchain was down 10.6%, Canaan was down 8.7%, and Iris Energy was down 18%. Bitcoin investor MicroStrategy also lost 7.6%.
Institutions are shorting bitcoin
CoinShare’s Weekly All Wealth Flows Report for Nov. 21 also paints a grim picture. Thus, money flows to short investment products are expected to represent 75% of total asset flows. It is said that a very negative overall mood towards the asset class may result.
Investments in bitcoin funds have been offset by investments in products that sell the asset short. The same goes for Ethereum, where inflows into these funds have reached record numbers.
Additionally, total assets under management (AUM) stands at $22 billion, a two-year low, according to CoinShares.
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