COIN Likely to Suffer From Crypto Collapse
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FTX Collapse Drags All Cryptos Down With It
As I write this, the crypto world has been rocked by the political and financial scandal around the FTX (FTT-USD) bankruptcy. My purpose today is not to discuss that scandal (a previous article covers that), but to look at how it will impact Coinbase Global (NASDAQ:COIN) going forward.
Coinbase is a digital currency exchange company that was founded in San Francisco, California in 2012. Founded by Brian Armstrong in 2012, Coinbase Global is the 800-pound gorilla in the American crypto space. Since that time, COIN quickly grew to become the dominant US crypto exchange by volume and user base.
The effects of the FTX collapse and alleged monumental fraud are disastrous for the crypto space.
- They have led to severe drops in the value of almost all cryptocurrencies, with even stalwart frontrunners like Solana losing about two-thirds of its value since the FTX revelations.
- The vast majority of crypto investors have been severely hurt by the bear markets. Many crypto investors were highly leverage and have suffered life-changing losses.
- One consequence of the scandal is the erosion of trust in any centrally run crypto brokerages. The crypto world is awash with discussions of which big brokerage or crypto currency will be the next domino to fall.
- Many pundits have emerged announcing the death knell for all cryptocurrencies. (I don’t agree, but I acknowledge the overwhelming negative sentiment.)
As the leading crypto brokerage in the space, Coinbase is obviously enormously impacted by the overall whirlwinds buffeting the crypto industry.
The Winds Buffeting Crypto in 2023
In discussing the impact on Coinbase, I’d like to begin with a macroeconomic picture of the crypto world recently painted by one of my favorite analysts: the pseudonymous “Guy” of Coin Bureau. In a recent video titled “Coin Bureau Crypto Predictions 2023: My TOP 10 LIST!”, Guy…
