The global central bank rate hikes, the risk of recession, and the collapse of FTX have severely weakened the crypto market. Investor confidence is falling, and not only cryptocurrencies but the entire infrastructure is suffering. There are many companies in the U.S. market whose share prices are directly dependent on bitcoin and other coins. One of them is Coinbase exchange. You would think, they make money on commissions, so what does the bitcoin exchange rate have to do with it?
Their ideals. While the bulk of Wall Street is losing faith in the crypto market, there remain investors and funds loyal to the technology. So Katie Wood, head of Ark Investment, is still building up her position in cryptocurrency companies. Since the beginning of November, her funds have bought about $56 million worth of #COIN stock. Ark now has a 4.7% stake in CoinBase.
This is not the only such investment Wood has made recently. The funds purchased shares of the well-known Grayscale Bitcoin Trust and cryptocurrency bank Silvergate Capital. The increase in positions in risky stocks began after the collapse of FTX.
The harsh reality. Now the actions of Cathy and the market participants following her do not inspire confidence. Her flagship fund, ARK Innovation, is performing very poorly. In one year, the fund’s assets have lost 70% of their value. All because of the fund’s focus on technology.
And what about CoinBase? The exchange has been operating at a loss for three quarters in a row. Taking into account expensive loans, cryptocurrency liquidity problems and other macro factors, we should not expect good performance in the near future. However, bitcoin may bottom out very soon. Its possible recovery, which crypto-enthusiasts hope for so much, will strengthen the position of exchanges.