The entire crypto market is gloom and doom, including large cap coins like Bitcoin and Ethereum, which lost 10% and 13% over the past week respectively. Now, things are turning sour for Coinbase, the first crypto exchange to hold an IPO. Its stock price has dropped by more than 11% over the past month. However, Cathie Wood continues to back the hard-hit stock, Coingape reports.
Crypto bloodbath continues
According to reports, top Coinbase officials including its chief product officers, directors, and chief accounting officers are dumping their company’s stock worth millions in the market. The large selling by Coinbase staff is a major reason for the sharp decline in prices apart from the ongoing crypto market bloodbath.
A bad turn for Coinbase
Back in April 2021, Coinbase gave each of its 1700 employees 100 shares ahead of its public listing. The stock was trading for $328 at the end of the first day. In November last year, it hit the all time high of $342. In September, Coinbase announced a $1.5 billion private senior note offering.
At the end of the exchange’s first trading day, its shares were worth just under $56 million. It exceeded its $250 reference price by almost $80. Initially, Coinbase was valued at $99.5 billion, improving on expectations of $65.3 billion. At the time, this catapulted it into the top 100 most valuable companies in the US.
SEC interference pushes exchange further down
Another reason for the downfall of this once popular stock is the SEC’s interference. Coinbase’s plans to enter the DeFi lending market fell through when SEC called their product a security and asked them to close down their lending operations. Coinbase CEO Brian Armstrong made this public via an official tweet:
They refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why.
In sum, all is not good in the camp of Coinbase. Its own officials are selling amid a crypto market dump and the SEC remains in hot pursuit. These factors are sending retail investors a very negative message. Yet, it might not all be so bleak. Cathie Wood and her company ARK Invest are still holding Coinbase shares. She’s been wrong about few things.
