Coinbase (COIN,$52.01) shares plummeted 14% on Monday as a broader crypto selloff slashed billions from the total market value. As a result, the stock fell to its third-largest single-day percentage decline on record as it extended its steep year-to-date decline – Coinbase stock is down 82% YTD.
The price of bitcoin has fallen below $24,000 for the first time since December 2020, and the cryptocurrency market has lost more than $200 billion of its value since the start of the weekend. Ethereum plunged more than 9% to about $1,340, while meme coins like Dogecoin were down more than 9%.
Crypto lender Celsius may have contributed to the price decline in digital currency and steep stock drops. Due to "extreme market conditions", the company announced it was pausing all withdrawals, swaps and transfers between accounts but has assured customers they will honor withdrawal obligations over time.
Why it matters
Crypto markets have previously experienced steep drops; however, this time, there are signs that companies working in the digital assets space are under a lot of stress right now. Smaller exchanges are taking precautions and halting withdrawals, and though it seems unlikely that Coinbase will do the same, it's important to consider the consequences of what's happening in the digital asset market for the company's future prospects.
