After making slight gains throughout the week, shares of Coinbase, one in all the biggest cryptocurrency exchanges, rose nearly 7% following a big rate cut by the U.S. Federal Reserve. The company’s shares reached a high of $174 midday Thursday before giving back gains to shut at $168. Coinbase’s share price has long served as something of an indicator of the broader cryptocurrency market, because it typically rises together with the value of Bitcoin. The stock has also performed higher during times of heightened investor risk appetite, including this week following the Fed’s rate cuts.
The recent rise in Coinbase’s share price represents a big comeback since last September, when the stock fell to as little as $76 ahead of the criminal trial of crypto fraudster Sam Bankman-Fried.
Despite a 13% drop in June and worst week of the yr in August, Coinbase has recovered, partly as a result of increasing transaction revenue. In the primary quarter of 2024, Coinbase reported $1.2 million in Transaction proceedswhich is nearly your entire yr of 2023. Trading volume on the platform has increased significantly in comparison with the previous yr, indicating a revival in user numbers.
It stays unclear whether Coinbase can hold on to those gains, but on Friday the share price was still around $169.
A big portion of Coinbase’s revenue comes from trading fees, which regularly makes it indicator of the crypto economy as a complete. Microstrategy, a cybersecurity company whose CEO pivoted to make the corporate the biggest corporate holder of bitcoin, also saw its share price rise by about 8% this week and held regular. Meanwhile, the value of bitcoin has risen by about 10% in recent days, briefly reaching $64,000 early Friday morning.
All this happened a day after Federal Reserve Chairman Jerome Powell announced the long-awaited cut in key rates of interest. The decision to chop rates by half a percentage point exceeded the expectations of some analysts who had assumed the Fed would go for a more moderate cut.
