Coinbase stock has been on a tear this year, outperforming both the broader tech sector and bellwether digital asset bitcoin.
COIN is now up about 60% since the start of 2023, with a market capitalization of around $12.2 billion. The US-traded crypto exchange was changing hands for around $56 a share through Tuesday’s closing bell in New York.
US technology heavyweights have likewise benefited this month from long-awaited macro tailwinds that have slowed — if not reversed — 2022’s carnage across digital and traditional assets.
But not on Coinbase’s level.
A prominent dollar-weighted tech stock index, trading on the New York Stock exchange under the ticker NYFang, has meanwhile recorded 16% year-to-date gains — leaving the index 44% behind Coinbase’s 60% pop over the same period.
Not to mention that the NASDAQ-100 Technology Sector Index, a collection of equally weighted tech stocks, has also posted a smaller increase: around 11%.
The former index tracks the showing of some of the largest US tech equities, including Meta Apple, Amazon, Netflix and Google. Its performance has marked a notable rebound from its downturn last year — but one still much weaker relative to Coinbase.
COIN booked a slight decline in after-hours trading on Tuesday, dipping to $52.48, good for a -1.8% decline, data show. Still, the exchange’s shares are up more than 23% compared to the price of bitcoin, which has soared 37% year to date.
Crypto’s blue-chip equity eked out a close above a previous daily high near $50 last week, its highest point in more than 40 days. It’s a welcome reprieve for the embattled exchange, which has taken hits from the broader industry sell-off that dragged down scores of its publicly traded digital asset peers last year, including crypto miners.
The collapse of the likes of Genesis, Three Arrows Capital, FTX and Voyager exacerbated selling pressure throughout 2022 amid concerns over the exchange’s path forward — and especially its correlation to shell-shocked digital assets.
Market participants by then had also grown wary of trusting centralized entities with their funds.
Speculation over the exchange and its stock came to a head by mid-December as it continued to post consecutive daily dips before reaching an all-time low of $31.55 by Jan. 6.
Following a jump on Jan. 9 — which more or less coincided with several of bitcoin’s price spikes — exchange sentiment was bolstered by its agreement to settle with New York state regulators.
Coinbase CEO Brian Armstrong promised shareholders in August he would diversify his company’s revenue by moving away from its reliance on trading fees.
“It’s never as good as it seems, it’s never as bad as it seems,” Armstrong told CNBC at the time over questions on the macroeconomic outlook and the exchange’s financial conditions. “We try not to get focused on short-term ups and downs, we just zoom out.”
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Source: https://blockworks.co/news/coinbase-stock-soaring