Coinbase stocks fall as Bitcoin slips, FTX-related concerns rise

Coinbase CEO and co-founder Brian Armstrong speaks during the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California.

Patrick T Fallon | AFP | Getty Images

coin base Shares closed more than 8% Monday, extending a slide that has taken the crypto exchange to its lowest level since its market debut in April 2021 Bitcoins The slump continues and investors fear contagion from FTX’s spectacular collapse earlier this month.

Nineteen months after going public with a market cap of over $85 billion, Coinbase has fallen below the $10 billion mark and has lost over a quarter of its value in the last four trading sessions.

It swirled questions about the health of FTX’s rival exchanges and sparked industry-wide sell-offs that caused some companies to temporarily suspend trading and others to prepare for potential bankruptcy filings. Analysts at Mizuho wrote in a note on Friday that daily volumes in the industry are 30% to 40% below their annual average.

Coinbase CEO Brian Armstrong said in an op-ed for CNBC on Nov. 11 that his company has “no material exposure to FTX” but that he has “sympathy for everyone involved.” Coinbase shares are down more than 83% year-to-date.

“It’s stressful whenever there’s a potential for customer loss in our industry, and a lot of people are losing a lot of money because of FTX’s woes,” Armstrong said.

Bank of America downgraded Coinbase on Friday, citing “contagion risk” for the cryptocurrency exchange, even though it’s not “another FTX.”

“That doesn’t make them immune to the broader impacts within the crypto ecosystem,” wrote Bank of America’s Jason Kupferberg.

Prior to FTX’s descent, the market was in the midst of a crypto winter that had sent prices for bitcoin and bitcoin ether crashed, forcing a number of companies into bankruptcy. Earlier this month, Coinbase reported a more than 50% year-over-year drop in revenue in the third quarter and a loss of $545 million. In June, the crypto exchange shed 18% of its workforce.

The sell-off that followed was even more extreme, with Bitcoin falling more than 3% on Monday to its lowest level in over two years and Ethereum falling over 6%. Solana, a coin touted and endorsed by FTX founder Sam Bankman-Fried, has lost over two-thirds of its value in two weeks.

Within days, FTX went from a $32 billion valuation to bankruptcy as liquidity dried up, customers demanded withdrawals and rival exchange Binance tore up its non-binding agreement to buy the company. FTX filed for Chapter 11 bankruptcy protection on November 11.

Bankman-Fried said the company’s assets were “fine” two days before he desperately sought a rescue. He has since tweeted that he is trying to recover deposits for the company’s customers.

CLOCK: CNBC’s full interview with Coinbase CEO Brian Armstrong

Watch CNBC's full interview with Coinbase CEO Brian Armstrong on the aftermath of FTX

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