Coinbase Stock Crushing Blue-chip Tech Index by 44%

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Coin­base stock has been on a tear this year, out­per­form­ing both the broad­er tech sec­tor and bell­wether dig­i­tal asset bitcoin.

COIN is now up about 60% since the start of 2023, with a mar­ket cap­i­tal­iza­tion of around $12.2 bil­lion. The US-trad­ed cryp­to exchange was chang­ing hands for around $56 a share through Tuesday’s clos­ing bell in New York. 

US tech­nol­o­gy heavy­weights have like­wise ben­e­fit­ed this month from long-await­ed macro tail­winds that have slowed — if not reversed — 2022’s car­nage across dig­i­tal and tra­di­tion­al assets. 

But not on Coinbase’s level. 

A promi­nent dol­lar-weight­ed tech stock index, trad­ing on the New York Stock exchange under the tick­er NYFang, has mean­while record­ed 16% year-to-date gains — leav­ing the index 44% behind Coinbase’s 60% pop over the same period. 

Not to men­tion that the NASDAQ-100 Tech­nol­o­gy Sec­tor Index, a col­lec­tion of equal­ly weight­ed tech stocks, has also post­ed a small­er increase: around 11%. 

The for­mer index tracks the show­ing of some of the largest US tech equi­ties, includ­ing Meta Apple, Ama­zon, Net­flix and Google. Its per­for­mance has marked a notable rebound from its down­turn last year — but one still much weak­er rel­a­tive to Coinbase.

COIN booked a slight decline in after-hours trad­ing on Tues­day, dip­ping to $52.48, good for a ‑1.8% decline, data show. Still, the exchange’s shares are up more than 23% com­pared to the price of bit­coin, which has soared 37% year to date. 

Crypto’s blue-chip equi­ty eked out a close above a pre­vi­ous dai­ly high near $50 last week, its high­est point in more than 40 days. It’s a wel­come reprieve for the embat­tled exchange, which has tak­en hits from the broad­er indus­try sell-off that dragged down scores of its pub­licly trad­ed dig­i­tal asset peers last year, includ­ing cryp­to miners. 

The col­lapse of the likes of Gen­e­sis, Three Arrows Cap­i­tal, FTX and Voy­ager exac­er­bat­ed sell­ing pres­sure through­out 2022 amid con­cerns over the exchange’s path for­ward — and espe­cial­ly its cor­re­la­tion to shell-shocked dig­i­tal assets.

Mar­ket par­tic­i­pants by then had also grown wary of trust­ing cen­tral­ized enti­ties with their funds. 

Spec­u­la­tion over the exchange and its stock came to a head by mid-Decem­ber as it con­tin­ued to post con­sec­u­tive dai­ly dips before reach­ing an all-time low of $31.55 by Jan. 6.

Fol­low­ing a jump on Jan. 9 — which more or less coin­cid­ed with sev­er­al of bitcoin’s price spikes — exchange sen­ti­ment was bol­stered by its agree­ment to set­tle with New York state reg­u­la­tors.

Coin­base CEO Bri­an Arm­strong promised share­hold­ers in August he would diver­si­fy his company’s rev­enue by mov­ing away from its reliance on trad­ing fees. 

“It’s nev­er as good as it seems, it’s nev­er as bad as it seems,” Arm­strong told CNBC at the time over ques­tions on the macro­eco­nom­ic out­look and the exchange’s finan­cial con­di­tions. “We try not to get focused on short-term ups and downs, we just zoom out.” 

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