Coinbase Shares Plunge To New Low; BTC, ETH Market Cap Tumble

Crypto entrepreneur Brian Armstrong-owned firm Coinbase, a platform for buying, selling and storing digital assets, and once had a market capitalization of $76 billion, is worth just $9.36 billion Tuesday.

The crash of the FTX crypto firm, which filed for bankruptcy earlier this month, has had other adverse effects on crypto platforms and on the price of major cryptocurrencies. For instance, bitcoin (BTC) crashed to new lows Tuesday at $15,713, which is an 18.19% plunge from the past month. Ether (ETH) on the other hand, was trading at $1085.4 at press time.

Shares of Coinbase Global Inc (COIN), which last year traded as high as $429 at the time of its debut on the Nasdaq, plummeted to a new low of $41.23 Tuesday at 11.34 am (UTC+8), which is down by 8.90%. COIN has been further roiled by the FTX collapse lately.

The slide comes after a senior research analyst at the Bank of America, downgraded the stock to neutral from buy, noting "contagious risk" for the crypto exchange platform.

Analyst Jason Kupferberg said Friday, "We think Coinbase likely faces a number of new headwinds over the near/medium-term due to the recent collapse of rival crypto exchange FTX."

Kupferberg noted that "COIN is not another FTX." He added, "but that does not make them immune from the broader fallout within the crypto ecosystem."

However, investors fear that this decline would be an aftermath of FTX's debacle, though Coinbase assured users that it has no exposure to FTX. Coinbase CFO Alesia Haas cleared the air last week in a live conversation with the Wall Street Journal, stating that "material decline in the price of bitcoin" would have an impact on Coinbase's results. Brian also stressed that whatever happened to FTX, "could never happen" on Coinbase.

Lawrence McDonald, an author, tweeted Sunday, "If you have capital at Coinbase - do your counterparty risk assessment now."

Cathie Wood's Ark Buys the Dip

Ark Investment Management fund has bought over 1.3 million shares of Coinbase this month alone, making its total holdings 8.37 million, per data compiled by Bloomberg.

Following Ark's purchase earlier this month, COIN shares rebounded to $57.46, however, the rally was brief.