Cryptocurrency Stocks Plunge on Bearish Bitcoin, Coinbase Takes a Hit

JPMorgan downgraded Coinbase stock to Reduce due to current market conditions.

Shares of several U.S.-listed cryptocurrency companies fell sharply due to the sharp market decline on January 23rd.

Earlier today, the price of Bitcoin was downgraded by an expected rise in the U.S. launch of the U.S. spot exchange-traded fund (ETF) in the United States. The flagship digital asset fell below $39,000, the lowest value figure since early December, data showed.

According to Yahoo Finance, the market move caused shares of cryptocurrency exchange Coinbase to fall 5 percent and shares of business intelligence firm MicroStrategy to drop 4 percent in pre-market trading.Bitmain Miner

Analysts at JPMorgan downgraded Coinbase’s stock rating from Neutral to Reduce in response to cryptocurrency market pressures and potential revenue diversion from Coinbase from newly launched ETFs.

The analyst explained that the exchange’s stock is valued “at $80/share on a normalized profitability basis, suggesting a 35% downside to its share price.”

Despite outperforming in 2023 (COIN +390% vs. SP500 +26%), analysts expect Coinbase to face challenges this year.

JPMorgan added, “Cryptocurrency prices are already under pressure; with Bitcoin falling below $40,000 as of this writing, we see a greater likelihood of further fading cryptocurrency ETF enthusiasm, leading to lower token prices, lower trading volumes, and fewer ancillary revenue opportunities for companies like Coinbase. ”

Cryptocurrency Miners’ Shares Fall

Bitcoin miners were not immune to the market decline as their stock values also fell.

Marathon Digital Holdings, a Nasdaq-listed bitcoin miner, fell 3.19 percent in pre-market, dropping its share price to about $16.08.

Another bitcoin miner, Riot Platforms, fell 2.45 percent to $10.34, while Canadian miner Hut 8 Corp dropped 2.05 percent. In addition, CleanSpark’s pre-market price was down 2.82 percent.Whatsminer Miner

Julio Moreno, head of research at CryptoQuant, noted that bitcoin miners are currently feeling the pain of lower prices and fees for the flagship digital asset.

Moreno explained.

“BTC prices are down 18% since the ETF was approved, total daily fees (in bitcoin) are down 87% since mid-December, and total daily revenue is also down 38% (in USD) since mid-December.”