Coinbase, Cryptocurrencies, Crypto
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coin baseCOIN (NYSE: COIN) began its public existence on April 14, 2021 as a hot IPO that cryptocurrency geeks couldn’t stop talking about.
There was more than the usual amount of “This goes to the moon!” free and sometimes paid advice specific to a particular type of IPO, regardless of era or industry. The certainty of success seemed obvious to the many participants.
When the stock was issued at a price of $250 – which, incidentally, was filled by few investors – an immediate rally at the open took it to $381 within minutes and then a rapid climb to $424, a high never to be seen again .
Since then, Coinbase has been an example of near-relentless selling as the crypto world it represents entered what those who were excited about it dubbed “winter” — although some have noted that it has lasted almost as long as so far an ice age.
This week’s news that the Securities and Exchange Commission has sent a notice from Wells to Coinbase likely puts an end to any lingering hyper-enthusiasm for the stock. The state regulator is sending the notice to notify a publicly traded company that it intends to take enforcement action.
Are cryptos actually securities that need to be registered with the SEC or not? That’s the fundamental underlying question, and Coinbase’s lawyers will be working hard to prove that the government should go away. The issue of staking lies in the legal mix.
Investors can’t be thrilled that the company received such a “warning, we’re after you” from the SEC and sellers were discharged again this week.
Here is the daily price chart for Coinbase Global:
Coinbase Global daily chart, 3 25 23.
stockcharts.com
The Thursday and Friday sales that followed the Wells announcement didn’t bring the stock back to the late December 2022/early January lows. The price is still above the 50-day and 200-day moving averages, but remains below the downtrend line connecting the August 2022 high and the mid-March 2023 high.
It’s semi-impressive that Coinbase is holding up as well as it did upon receiving the announcement, but a close below the recent low of $50 would be an issue.
The weekly chart for Coinbase Global looks like this:
Coinbase Global Weekly Chart, 3 25 23.
stockcharts.com
You can see that the stock never peaked again in the IPO session and generally followed the path of the well-known cryptocurrency downtrend. It looked like Coinbase might make it above the 50-week moving average, but that is now being questioned, a negative from a price chart analysis.
For a different perspective, here is the point and figure chart for Coinbase Global:
This type of chart view gives you a better sense of how far the stock has fallen and where the support levels are ($51 and $32).
No investment advice. For educational purposes only.
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My Marketocracy work is featured in The Warren Buffett’s Next Door: The World’s Greatest Investors You’ve Never Heard Of by Forbes Investments Editor Matt Schifrin. I am a graduate of the University of North Carolina. No investment advice.
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