Checking in with CoinBase and Silvergate Capital
Volatility in the cryptospace is showing no signs of slowing down. The fallout from the collapse of FTX continues to weigh on cryptocurrency and crypto-adjacent stocks, with multiple falling to multi-year lows early last month.
Recently, MicroStrategy (MSTR), the largest corporate buyer of Bitcoin (BTC), saw its shares tumble, amid the industry's efforts to fight bankruptcies, dour sentiment, and heavy regulatory scrutiny.
Amid this tumultuous environment, two crypto stock are making big moves today.
Coinbase Settles With New York Regulators
Yesterday, Coinbase Global Inc (NASDAQ:COIN) agreed to pay a $50 million fine to New York regulators. The company was found to have let customers open accounts with simple social media verification counting as background checks, as well as violating anti-money laundering laws. According to the state's Department of Financial Services, "Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth."
Following the news, Cowen and Company downgraded COIN to "market perform" from "outperform," and lowered its price target to $36 from $75 -- a 52% cut. Coming into today, analysts were split, though there's still room for downgrades considering 11 of 21 rate Coinbase stock a "buy" or better. What's more, the 12-month consensus target price of $72.36 is a 113.8% premium to the equity's current perch, signaling room for more adjustments.
Coinbase stock was last seen 9.3% lower to trade at $34.23, so it's managing to hold above its Dec. 28, roughly two year-lows of $31.83. A confluence of short- and long-term moving averages are pressuring COIN, too, as it sits more than 85% lower from just a year ago.
FTX Collapse Sinks Silvergate Capital
Silvergate Capital Corp (NYSE:SI) shared that its digital asset deposits fell by $8.1 billion from Sep. 30 though the end of 2022. The crypto friendly bank was dented by a "crisis of confidence" in the crypto sector, and was subsequently forced to sell $5.2 billion in debt to cover withdrawals. That sale resulted in a $718 million fourth-quarter loss, forcing the company to cut 40% of its staff.
At last glance, Silvergate stock is 44% lower to trade at $12.28. Now trading at more than two-year lows, SI's all time high of $239.26 -- from November 2021 -- is all but a distant memory. The equity now sports a more than 91% year-over-year deficit.