Why Coinbase Global Stock Couldn't Hold On to Today's Gains?
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| Why Coinbase Global Stock Couldn't Hold On to Today's Gains? (Image: varchev.com) |
How did it go?
Prior to investors starting to sell off the shares once more, Coinbase Global's (NASDAQ: COIN) Monday got off to a booming start. Early on, the Bitcoin (CRYPTO: BTC) price increase above a psychologically significant price level helped the operator of a cryptocurrency exchange; nevertheless, for the most part, such assets are still trembling as they adjust to being trapped in the crypto winter.
What then
Bitcoin crept past the $20,000 threshold on the first trading day of the week; by late afternoon trading, it had crept up by about 1% over the previous 24 hours.
Although amounts like $20,000 may not be noteworthy in and of itself, many investors find comfort in them because of their roundness.
Investors over the weekend drove Bitcoin's price down to around $19,500.
On Monday, other coins and tokens also performed reasonably well.
While other assets like Cardano and Shiba Inu were recording more moderate gains, Ethereum, another popular asset traded through Coinbase, was gaining by almost 4 percent.
What follows now
Coinbase is not a currency or token itself; it is merely an exchange operator. Although it can profit from quick, reflexive responses to incidents like Bitcoin crossing the $20,000 river once more, its benefits do not materialise right away.
Complicating matters, Federal Reserve Chairman Jerome Powell's Friday comment that the monetary authority would keep raising interest rates was one of Monday's biggest drivers for equities and cryptocurrencies. This is probably what investors were thinking when they began Monday's reversal of Coinbase's gains.
Powell wants to combat inflation, but raising interest rates typically causes investors to pull their money away from assets they perceive to be more speculative. And you can bet it goes double if the majority of the investing community views cryptocurrencies as speculative.
