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: Coinbase stock sinks as anxiety builds in crypto market

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Shares of Coinbase Global Inc. were cratering toward one of their largest drops on record Monday after a different cryptocurrency platform’s decision to pause withdrawals and transfers led to further jitters about the market for digital assets.

Coinbase’s stock
COIN,
-14.05%

was down about 14% in Monday morning trading, after falling as much as 21.6% earlier in the session. The stock was on track for its third largest single-day percentage decline on record as it extended its steep year-to-date decline, with shares off nearly 80% so far in 2022.

Prices for crypto assets were down sharply as well. Bitcoin
BTCUSD,
-15.88%

was falling 14% Monday, ethereum
ETHUSD,
-18.95%

was off 16%, and litecoin
LTCUSD,
-16.21%

was down 15%.

Read: Bitcoin tumbles through $24,000 in crypto crash. This chart shows how much worse a selloff could get.

The steep stock drops come after crypto lending platform Celsius Networks LLC said Sunday that it would be pausing withdrawals, swaps, and transfers between accounts. The company cited “extreme market conditions” and said in a blog post that the move would “put Celsius in a better position to honor, over time, its withdrawal obligations.”

Elsewhere, crypto exchange Binance put a pause on bitcoin withdrawals Monday morning.

Read: After petition for leadership changes, Coinbase CEO tells workers to quit if they don’t believe in top execs

The moves are taking place in the wake of Consensus, a major cryptocurrency conference that wrapped up Sunday. Christopher Brendler, a D.A. Davidson analyst who covers crypto miners, carried a cautious tone when recapping the event.

“Unfortunately, we came away significantly more bearish (as) the sharp drop in liquidity has stressed even the strongest players,” he wrote. “While larger, public companies are much better positioned and might still take advantage of forced consolidation, the weekend drop in BTC and spike in network hashrate exacerbates what is already a very difficult situation.”

Brendler’s coverage includes crypto-mining companies such as Core Scientific Inc.
CORZ,
-12.66%
,
Riot Blockchain Inc.
RIOT,
-12.75%
,
and Marathon Digital Holdings Inc.
MARA,
-13.46%
,
all of which are down more than 11% Monday.

Don’t miss: ‘I thought it was a sick joke’—They gave up other job offers to work for Coinbase, and are now unemployed

He speculated that Block Inc.
SQ,
-10.87%
,
the company formerly known as Square, could be a “a great fit” for a merger with a mining company, though he acknowledged that Chief Executive Jack Dorsey “is more interested in increasing decentralization rather than rolling up miners so any deal would likely be small and more of a learning experience.”

Block, which allows users of its Cash App mobile wallet to trade bitcoin, is seeing a nearly 10% plunge in its own stock Monday. Baird analyst David Koning wrote Monday that he expects Block’s bitcoin gross profit to be about 3% of company gross profit this year, down from roughly 5% last year.

“We don’t believe any of our companies have material exposure to cryptocurrency volumes,” he wrote of his payments coverage universe, which includes Block, Mastercard Inc.
MA,
-3.75%
,
and Visa Inc.
V,
-3.56%

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