Since its all-time high of $357.39 on November 9, 2021, the price of COIN has fallen 86%.
Analysts did not seem to be soothed by Armstrong’s statements of assurance.
As of today, Bank of America said it will be shifting its rating on Coinbase shares from buy to neutral. Since its all-time high of $357.39 on November 9, 2021, the price of COIN has fallen 86%, trading at $45.36 right now, a decrease of 7% over the last 24 hours.
According to the senior equity research analyst at Bank of America Merrill Lynch, “We think Coinbase likely faces a number of new headwinds over the near/medium-term due to the recent collapse of rival crypto exchange FTX. As a result, we downgrade COIN to Neutral from Buy and reduce our estimates.”
Huge Crisis Due to FTX
Leaked financial papers of Sam Bankman- Fried’s other firm, Alameda Research, showed that the majority of Alameda’s assets were in FTX-issued FTT tokens and other extremely illiquid assets. This was the beginning of the end for FTX. Because of this, Binance CEO Changpeng “CZ” Zhao said that all of Binance’s holdings in FTT will be sold out.
This action resulted in a precipitous drop in the token’s value, as panicked buyers were quickly followed by sellers. As a consequence, customer trust in FTX plummeted, triggering a “bank run” and a liquidity crisis on the exchange. Then, on November 11 of last week, FTX declared bankruptcy.
Coinbase CEO Brian Armstrong tweeted on November 8 that the company “doesn’t have any material exposure to FTX or FTT (and no exposure to Alameda)” to reassure users and investors that their funds were secure. Analysts in the market did not seem to be soothed by Armstrong’s statements as the fallout from FTX’s demise rippled across the cryptocurrency industry.