By
Steve Muchoki
May 6th, 2024
Coinbase Global stock dropped in premarket trading even though large mega banks and traditional asset managers are still betting big on COIN.
Coinbase Global (NASDAQ: COIN) stock fell today due to a dip in general crypto prices and the broader market. The major American crypto exchange saw its shares fall by 2.35% in trading yesterday, as stocks in the crypto space tend to move with crypto prices. As of early evening yesterday, Bitcoin fell by 1.8% and is now trading at $45,176. Ethereum also dropped by 2.1% and is currently $3,049. At the moment, COIN is at a premarket price of $249.13.
Coinbase reported its second-quarter earnings last Tuesday with $3.45 in adjusted earnings per share. This figure significantly exceeded the consensus estimate by analysts, which was $2.33. In addition, the exchange’s reported revenue of $2.23 billion also surpassed the $1.78 billion consensus estimate by analysts for the same period. Despite these positives, the Coinbase Global management suggested there might be lower trading volume on the platform for the third quarter. The management believes that this reduced volume contributing to the dip in stock price.
General Reception to Coinbase Global Stock Since the Platform Went Public Earlier this Year
Coinbase went public on the Nasdaq exchange on April 14 this year, closing with an $87.5 billion valuation. However, COIN has dropped nearly 26% in that time. Despite this, many investors, including traditional institutions like megabanks and top asset managers, remain bullish on its stocks. Such investors include Goldman Sachs, JPMorgan Chase & Co, CitiGroup, and Bank of America. In addition, asset managers like Millennium Management, BlackRock, Miller Value Partners, and BridgeWater also round off the heavyweight investors’ lineup.
Even state-run investment entities, traditionally viewed as more straitlaced, held notable Coinbase positions last quarter. For instance, Tennessee’s Treasury revealed to security regulators on June 30 that they held COIN valued at $1.7 million. In addition, Pennsylvania’s public school retirement fund went long on $2.6 million, while the Wisconsin Investment Board had a stake valued at $6.4 million. Utah Retirement Systems rounded off the state-run investment pool with $13.2 million.
Furthermore, other companies that have recently disclosed stakes in Coinbase are Tiger Global and Intel. The leading computer chip manufacturing company revealed in a filing with the SEC that it holds 3,014 shares of Coinbase’s common stock, currently worth over $770,000. According to a Barron’s report, Intel had to disclose this information because it has publicly traded investments worth more than $100 million.
Crypto Growth is a Major Driving Influence
These investments by traditional financial institutions, many of which were initially averse to the crypto space, reflect just how much demand for exposure to digital currencies has grown. Many of these traditional companies are now staking multimillion-dollar bets on the crypto economy’s upside.
However, it is worth noting that not all these finance powerhouses are wholly long on COIN. Citadel Advisors LLC had over $1.3 billion in COIN, over $1 billion of which was put into calls and puts. Pennsylvania-based Susquehanna International Group also staked nearly $1.3 billion in COIN bets, the majority of which were in hedges.