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Coinbase drops as crypto joins broader markets in steep sell-off on China fears

Markets Insider
Markets Insider
 2021-09-20

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Coinbase and Bitcoin

Coinbase fell as much as 5.7% on Monday amid a broader sell-off in the crypto and stock markets, intensified by news the crypto exchange would give up on a lending product after a tiff with the SEC .

Shares in Coinbase fell as low as $231.15 on Monday from the previous Friday's closing price of $245.19. The stock closed lower by 3.5%, finishing Monday's session at $236.53.

The dip in Coinbase shares coincided with steep drops in the prices of nearly all major cryptocurrencies . Bitcoin and ether tumbled as much as 10.4% and 12.9%, respectively, as dogecoin, solana, and XRP plunged alongside the two biggest tokens.

Likewise, US stock markets declined sharply, with many analysts pinning the blame on the brewing liquidity crisis at Evergrande and the implications for China's economy.

But others pointed to US domestic policy as the proximate driver of Monday's dip.

"The Evergrande situation, although big and impactful, isn't the reason for this sell-off," said Jamie Cox of Harris Financial Group. "Rather, stalemates in Congress on the debt ceiling, worries on policy changes or mistakes in monetary policy, and a litany of proposed tax increases have dampened the mood for investors."

As Coinbase stock swooned, so did the company's bonds, which trade at junk levels. The bonds fell as low as 95.75 cents on the dollar as news emerged that the company was giving up on a lending product that the SEC had threatened to block by legal action .

The Coinbase bonds were already among the worst-performing newly issued debt, according to Bloomberg .

Read the original article on Business Insider

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