Tech
Coinbase Stock Rebounds 35% Following SEC Lawsuit, Market Cap at $16.4 Billion
(CTN News) – Coinbase, the leading cryptocurrency exchange, experienced a significant drop in its shares after the Securities and Exchange Commission (SEC) filed lawsuits against Binance and Coinbase.
However, the company’s stock has since recovered, soaring by approximately 35% following a low of $51 on the day of the SEC’s lawsuit. This resurgence mirrors the overall rebound of the crypto market, fueled by a wave of optimism and the rising popularity of Bitcoin.
BlackRock’s recent filing for a Bitcoin spot exchange-traded fund (ETF) has further contributed to Bitcoin’s surge and the subsequent market recovery.
Bitcoin’s Resurgence and BlackRock’s ETF Filing:
Bitcoin’s recent revival can be attributed to BlackRock, the largest asset manager in the United States, applying to a Bitcoin spot ETF. This unexpected move was a vote of confidence in Bitcoin, propelling its price to reach the highest level in over a year.
Following BlackRock’s application, several other asset managers filed for Bitcoin spot ETFs, potentially opening the doors for substantial investments from brokerage accounts and pension funds.
The overall effect has been a surge in Bitcoin’s price and renewed optimism within the cryptocurrency industry.
Coinbase’s Connection to BlackRock’s ETF:
BlackRock’s ETF filing boosted Bitcoin and highlighted Coinbase’s importance. The application listed Coinbase, the publicly traded crypto exchange, as the custodian responsible for holding the trust’s underlying Bitcoin.
Coinbase stock is now trading higher than before the SEC suit against Binance. Two ways to interpret this (+both can be true)
1) It had sold off in anticipation of the SEC’s “Endgame”
2) The market doesn’t believe Endgame will work. pic.twitter.com/vVC0jnUic6— Omid Malekan 🧙🏽♂️ (@malekanoms) June 27, 2023
This inclusion signaled that the allegations made by the SEC were not as significant as initially perceived. Omid Malekan, a crypto market specialist and adjunct professor at Columbia Business School, emphasized that this move by BlackRock indicated that the worst of the U.S. regulatory crackdown might be behind us.
Market Sentiment and Future Outlook:
The recent resurgence of Coinbase’s stock, along with the rally in Bitcoin and the broader crypto market, suggests a positive shift in market sentiment.
The total market capitalization of all cryptocurrencies has increased from around $1 trillion to approximately $1.17 trillion, highlighting renewed investor confidence.
The support from BlackRock, coupled with the filing of various Bitcoin spot ETF applications, indicates growing institutional interest and potential funds inflows into the crypto market.