coin base shares fell about 20% in early June following successful Securities and Exchange Commission lawsuits against Binance and then coin base.
But Coinbase shares have rallied, rising 35% after falling to a low of around $51 on the day the SEC sued the largest U.S. crypto exchange. As of Wednesday morning, the shares were trading near of $70, and the market capitalization of the publicly traded company has risen to around $16.4 billion.
Coinbase's resurgence reflects the broader crypto market boomerang in June, mounting a Wall Street Fueled Rush for Bitcoin that has lifted other cryptocurrencies and injected optimism into an industry reeling from a battery of federal government enforcement.
โCoinbase shares have been rallying, the Bitcoin price has been rallying, and then these two things generally play against each other.โ Omid Malekanan adjunct professor at Columbia Business School who specializes in the crypto market, said Fortune.
Coinbase shares are now trading higher than before the SEC lawsuit against Binance. Two ways to interpret this (+both can be true)
1) It had been sold in anticipation of the "Endgame" of the SEC.
2) The market doesn't think Endgame will work. pic.twitter.com/vVC0jnUic6โ Omid Malekan ๐ง๐ฝโโ๏ธ (@malekanoms) June 27, 2023
Specifically, Bitcoin's resurgence is tied to BlackRock's recent one. presentation of an application for the Bitcoin exchange-traded fund, a surprising vote of confidence from the largest asset manager in the US in the world's largest cryptocurrency by market capitalization.
Shortly after the BlackRock app went public, the price of Bitcoin it shot itselfnotching his highest price in over a year, as a host of other asset managers filed applications for Bitcoin spot ETFs, potentially opening the cryptocurrency to trillions of dollars of brokerage accounts and pension funds.
And where Bitcoin goes, so does the broader market, as the total market capitalization of all cryptocurrencies has jumped from about $1 trillion to around $1.17 trillion now.
Furthermore, Malekan noted that BlackRock's ETF filing was not only a vote of confidence in Bitcoin but also in Coinbase. The request from him listed the publicly traded crypto exchange as the custodian to hold the underlying Bitcoin in the trust.
โFor them to go ahead and list Coinbase as custodian of their ETF was a strong signal that these SEC allegations are not that important,โ he said. Fortune.
Malekan added: "I think the market is telling us that the worst is over, as far as the US regulatory crackdown is concerned."
