What happened
Stocks of the leading cryptocurrency trading company world coinbase ( COIN -8.47% ) they were down 5.4% today at 1:30 pm ET. Cryptocurrencies across the board fell in value over the past 24-hour period, dragging down Coinbase. Bitcoin ( BTC -2.62% ) fell 3.2%, and Ethereal ( ETH -3.61% ) down 4.2% on broad weakness in the cryptoverse. Investor angst has been building this week as Russia's attack on Ukraine intensifies.
Image source: Getty Images.
So what
In related news, some officials in Ukraine are calling on Coinbase and other crypto exchanges to ban all transactions for Russians. The company is following international sanctions against Russia, but says it will not impose a blanket ban on cryptocurrency trading for all Russian citizens.
Coinbase also released Q4 2021 earnings in late February that demonstrated its ability to withstand wild fluctuations in cryptocurrency prices and continue to grow. Net income was double that of Q3 and 401% higher than Q4 2020 as trading volume soared higher.
Now what
In addition to the war between Russia and Ukraine, Coinbase has also been struggling alongside other high-growth stocks in light of the Fed's expected first rate hike during the pandemic era later this month. The Fed has committed to trying to fight inflation, so several rate hikes are likely as 2022 progresses. Higher interest rates reduce the present value of risky assets such as stocks.
However, interest in trading and investing in cryptocurrencies using the Coinbase platform is skyrocketing, and currently uses beyond speculation are also on the rise. These include non-fungible tokens (NFT), decentralized finance (DeFi) applicationsand subscription income that enables participation and passive income from cryptocurrency holdings.
Coinbase is trading for around 11x 2021 net income, so the market is still discounting the crypto exchange on concerns that interest in crypto trading could be cyclical and eventually hit a downturn.
But the crypto is gaining steady adoption among consumers around the world, raising the possibility that both it and the blockchain technology it is based on will be here to stay. If you are looking for a company to invest in for the long term in this movement, Coinbase deserves to be top of mind.
This article represents the opinion of the author, who may not agree with the "official" recommendation position of a premium Motley Fool advisory service. We are motley! Questioning an investment thesis, even one of your own, helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
