Coinbase is the largest cryptocurrency exchange market operating out of the United States. The crypto organization filed for a public listing last year, keeping in view the rapidly increasing interest in the cryptocurrency sector globally. However, during the ongoing bear market, Coinbase stocks have taken a critical hit as well. The situation has escalated to a dire state recently.
Some experienced investors are sounding the bankruptcy alarm and warning the clients of Coinbase to move their cryptocurrency reserves off the platform at their earliest. The start of chaos started when Coinbase made its first-quarter reports public in 2022. The reports wreaked havoc among investors by unveiling a 53% loss during the first three months.
The financial report issued by Coinbase also cited total revenue of $1.16 billion, which accounted for a loss of $430 million last quarter. Dan Dolev is a financial markets expert and analyst from Mizuho who noted that the main cause of the Coinbase stock crash was the early arrival of Crypto Winter, and he further claimed that the crypto transaction volume declined drastically.
On the other hand, Coinbase investors are facing defeat on two fronts, with the stock of the company trying to sustain a 44% drop. The company was listed on NASDAQ last year in April, and its stocks managed to get a high return of $328.28 during its first day of trading. However, after a year of creating monumental profits for its shareholders, Coinbase stocks are now down 78% from their opening day market value.
Coinbase Bankruptcy
Sophia Zaller is a cryptocurrency underwriter working at Relm Insurance. She recently commented on the matter of Coinbase bankruptcy disclosure and stated that it could be a major red flag for the investors. It is worth noting that when an organization declares bankruptcy, the client investment and reserves on the platform can turn into the property of the bankrupt organization.
On the other hand, some investors believe that Coinbase might be too big to fail. There are examples like Coinnest that went under despite being seen as the 3rd largest cryptocurrency exchange platform in the booming markets of South Korea. Coinnest officials declared during their bankruptcy proceedings that the closure of the cryptocurrency exchange occurred due to a massive drop out of the active trading accounts.