• Coinbase’s stock has dropped 86% from its $100 billion IPO valuation, and the SEC recently sued them for violating US securities law.
• The entire crypto industry has been suffering since November 2021 due to tight monetary policies from central banks.
• Despite initial investor optimism during the pandemic, cryptocurrencies are still high-risk assets.
Coinbase Experiences Major Decline
Coinbase, the world’s largest publicly traded crypto company, closed last week trading at a price of $64.55. This represented an 86% decline from its IPO in April 2021, when the company floated at a valuation of nearly $100 billion. Tuesday morning opened with a 27% tumble after the SEC sued Coinbase for failing to register as a broker, national securities exchange or clearing agency and thus violating US securities law. As of Thursday morning, Coinbase is trading at $53.26 and its market cap is now $12.5 billion.
Crypto Industry Suffers Since November 2021
The cryptocurrency industry has been hit hard since November 2021 due to tight monetary policies from central banks around the world that have sought to curb inflationary pressures resulting from the pandemic period boom in Robinhood and cryptocurrency markets that had seen explosive gains across board. Despite these large gains, Bitcoin and other cryptos are still seen as high risk assets by many investors leading to continued declines in prices across multiple exchanges including Coinbase itself which experienced an 86% decline in value since its IPO date.
SEC Sues Coinbase
This week it was announced that the SEC had filed suit against Coinbase for failing to register as appropriate under US securities law which led to another 27% plunge in share prices on Tuesday morning when markets opened following this announcement; shares were already down 7.5% Monday after Binance was sued by regulators earlier that day as well adding additional downward pressure on Bitcoin related stocks such as Coinbase itself which suffered accordingly due to being heavily tied into the overall health of this market sector overall .
Court Case Representing Major Day For Crypto
Our Head of Research Dan Ashmore writes that this court case represents a huge day for crypto and is much more intriguing than Binance’s lawsuit due to its implications for not only one exchange but all others operating within this sector who could face similar litigation if they do not take proper steps towards compliance with existing laws and regulations governing their activities going forward regardless of their opinion on said laws themselves or how they might affect their business operations moving ahead into an increasingly regulated future .
Conclusion: Fate Of Entire Company At Stake
The fate of not only Coinbase but also potentially all other crypto companies hangs in balance depending upon what happens with this court case between them and the SEC; if found guilty then it could set precedent for further regulatory action taken against other exchanges while conversely if they are exonerated then perhaps greater clarity can be obtained regarding expectations about proper conduct within this space allowing those entities involved therein greater freedom with respect to how best serve their customers without fear of repercussions by local authorities later down line .