TLDR
- Suffering a 31% devaluation, Coinbase is experiencing its most negative quarter since the fall of FTX late in 2022.
- Bitcoin has undergone a decrease of more than 10% in this time frame, while Ethereum has experienced a substantial 45% decline.
- The decline in the cryptocurrency arena is linked to broader economic issues such as the ongoing trade war initiated by Trump and growing recession concerns.
- Stocks associated with cryptocurrencies have shown even more volatility than Bitcoin, resulting in sharper declines.
- Gold has emerged as a safe haven against uncertainty, recording its strongest quarterly performance since 1986.
Coinbase, trading under the ticker COIN, has seen its shares drop 31% within this quarter. Following a four-day losing streak, Coinbase's shares reached their steepest decline since the FTX incident in late 2022, closing at $172.23 at the end of Monday, down 1% in the session.
The downturn isn't unique to Coinbase; nearly every major stock connected to cryptocurrency has suffered similar declines. Bitcoin mining companies are particularly affected, with Core Scientific down 48% and Riot Platforms falling over 30%.
Bitcoin itself has pulled back by more than 10% within this quarter. Despite showing an improvement of 16% over the past year, Ethereum has suffered a more acute drop, falling by about 45% year-to-date to around $1,800.
The challenges facing the crypto market reflect intensifying economic anxieties, especially as Trump’s global trade maneuvers have raised significant concerns over their repercussions on the U.S. economy. Data releases adding to recession worries have exacerbated these fears.
Investments have shifted away from high-risk options, with cryptocurrencies and related stocks, known for their volatility, bearing the brunt of these moves. This mirrors broader market patterns, like the S&P 500 trending towards its worst quarter since mid-2022.
Coinbase is under particular strain due to its profit framework, as it relies on trading volumes from various tokens, including Ethereum, which has seen a quicker sell-off than Bitcoin.
Owen Lau, an analyst at Oppenheimer, remarked, 'This situation isn't driven by essentials; rather, the macroeconomic environment with tariffs and trade war fears are the main drivers here.'
Crypto-related stocks offer more risk compared to Bitcoin. Investing in these companies introduces the possibility of insolvency, meaning they may tumble even faster amid economic uncertainties.
Post-Inauguration Reality Check
Today's market atmosphere is markedly different from early 2025, when Bitcoin reached a record high of over $109,000 on the day Trump took office in January, but has since declined to about $82,000.
In the current climate, gold has become the prominent hedge against ongoing risks, achieving its best quarter since 1986 and hitting new all-time highs. This development contests Bitcoin's image as 'digital gold.'
Some industry enthusiasts are disappointed by Trump’s actions concerning crypto. Bitcoin fell earlier this month following his establishment of a strategic reserve of the cryptocurrency, which didn’t involve utilizing taxpayer funds as some had hoped.
A majority of stocks related to cryptocurrency have lost the gains achieved after the election. Yet, Michael Saylor’s Strategy remains among the few still positive since November 5.
The technical analysis for Coinbase indicates troubling signs, as its stock has formed a downtrend pattern since last November. The 50-day average seems likely to cross below the 200-day average, forming a bearish 'death cross.'
Crucial support levels for Coinbase are around $146, close to the swing low from September of last year. If the downward trend persists beyond this level, the stock might slide to about $115. Resistance to watch is near $206, around a peak seen in March.
Experts caution that additional obstacles may arise ahead, with President Trump’s 'Liberation Day' on April 2nd poised to introduce aggressive tariffs, potentially increasing pressure on assets like cryptocurrencies.
Despite facing market difficulties, the crypto sector continues to grow in influence in Washington, inching closer to converging with traditional finance sectors. However, this hasn't yet catalyzed a market reversal.
Cryptocurrency analyst Connor Loewen from 3iQ commented, 'Given what we experienced a few months ago, it's hard to foresee how the situation could become more intense. We need to identify new impetus going forward.'
