Shares of Coinbase Global Inc. tumbled in active trading Tuesday as the cryptocurrency platform faced concerns over increased competition from the Binance-FTX merger deal. The stock
sank 10.8% to $50.83, the lowest closing price since July 1. Trading volume ballooned to 61.9 million shares, compared with the full-day average over the past 30 days of about 11.4 million shares.
The selloff comes after Binance, the world’s largest crypto exchange, said it had signed a letter of intent to buy rival FTX, which faced a “significant” liquidity crunch. “This is a big deal,” wrote Bernstein analyst Harshita Rawat in a note to clients. “Even though Binance and FTX don’t directly compete with Coinbase (Binance.US and FTX US do, but they are much smaller), we believe this deal represents a seismic shift in [Coinbase’s] competitive landscape.” Rawat reiterated the market-perform rating she’s had on Coinbase stock since she started covering the company soon after it went public in April 2021. Her $46 stock-price target implies a further 7% drop from current levels. A Binance-FTX combination would represent a “significant consolidation and a global crypto powerhouse in crypto trading,” Rawat said. It also creates a “formidable” position in international markets, which is a growth market for Coinbase. Separately, bitcoin
plunged as much as 16.8% intraday before paring losses to close down 9.8% at $18,554, according to FactSet data, the low …