A day after cryptocurrency exchange Coinbase went public in a direct listing on Nasdaq with its market capitalization exceeding $100 billion before dropping, it shares a whipsawed Thursday morning.
Coinbase’s stock price went as high as 6.4 percent before dropping more than 1 percent as at 10:15 a.m. ET. It then recovered to gain about 1 percent. According to the company, it temporarily disallowed withdrawals of ether tokens as a result of an issue associated to a recent upgrade to the currency’s network. The company also said that the “Berlin handfork” bug is a part of its strategic efforts of making the Ethereum (ETH) blockchain faster and more secure.
The company tweeted an official statement that “Due to an issue with the recent network upgrade, we’ve temporarily disabled ETH and ERC20 withdrawals from Coinbase and Coinbase Pro. Receivers of these assets may also be delayed. We’re working on a fix, and we’ll send an update as soon as we have one.
On Wednesday, Coinbase was shortly valued at $100 billion in what was its Nasdaq debut. The stock closed at $328.28 per share valuing Coinbase at $85.8 billion on a fully diluted basis.
Cathie Wood, the founder and CEO of Ark Invest loaded up about $245.9 million worth of Coinbase shares on the firm’s first day of trading and this has been one of the topics on the lips of investors. Cathie Wood is known to be a Bitcoin supporter and believes that Bitcoin, as well as other tokens could become part of the recommended portfolio for everyday investors with time.
Coinbase’s Nasdaq debut was well-celebrated and was a ‘breaking point’ for cryptocurrency in general. This is because cryptocurrency has over the years faced huge amount of criticism and started making headway only recently. Although cryptocurrency has seen a new dawn, there are still concerns that volatility in digital assets and regulatory uncertainty may weigh on the company’s share price long term coupled with the tough competition from other cryptocurrency exchange platforms like Binance, Gemini and Kraken.
Coinbase estimated revenue for the first quarter of 2021 was $1.8 billion. When compared to the figures of the first quarter of last year, Coinbase has seen a massive increase. Coinbase has also grown in the number of monthly active users. Currently, Coinbase has over 6 million monthly active users compared to 2.8 million from three months ago.