The price of Bitcoin and cryptocurrency has been on a rollercoaster ride this year. After a peak in April, they crashed back to earth. Subscribe now to Forbes’ CryptoAsset & Blockchain Advisor to discover the crypto blockbusters that are poised for 1,000% gains.
The rally in bitcoin prices coincided with Coinbase’s Nasdaq-debut, a major U.S. cryptocurrency exchange. This helped to drive interest to the stock, but it failed to stop it from falling with bitcoin prices since April.
Analysts at Wall Street giant Goldman Sachs reiterate their “buy” rating of Coinbase ahead of its closely-watched second-quarter earnings report. They believe that even a lower bitcoin price will be good for Coinbase’s earnings.
The note to clients stated that Coinbase’s trading boom was caused by “significantly elevated crypto asset volatility.” This will result in Coinbase taking in more fees. Coindesk first reported the news.
Goldman Sachs was a financial advisor to Coinbase’s direct listing. It cited an earlier analyst report that stated that high fees would continue flowing into the exchange even though bitcoin prices fall further.
The stock price of Coinbase is down by a third since its April peak. China closed down miners, who use powerful computers in China to protect bitcoin and other crypto networks. This caused the crypto sell-off.
Coinbase fees could have been affected by a decline in trading volume across major exchanges following the crypto and bitcoin price crash.
Analysis by CryptoCompare this week revealed that trading volumes at the biggest exchanges, such as Coinbase, Kraken, and Binance, dropped more than 40% in June. Reuters first reported that spot trading volumes fell 42.7% between May and $2.7 trillion. Derivative volumes were down 40.7%, to $3.2 trillion.
CNBC’s Teddy Vallee, Pervalle global chief investment officer, stated that the digital asset ecosystem was punched in its face. Participants are usually very fearful when there is a significant sell-off, and they pull back their chips.