Two days after launching the beta of the new NFT market, shares of Coinbase fell to an all-time low in trading over the weekend.
The company announced its plans to enter the NFT space last October, and more than 1.5 million people have signed up to the waitlist. The beta launch starts on April 20.
Meanwhile, shares of Coinbase have been on a steady decline since the start of the month, according to data from Yahoo!Finance, and this week’s beta launch hasn’t changed that trajectory. On Friday, $COIN hit a low of $131.25 and then closed at $131.52.
While the site is accessible to everyone at this time, with the launch of the beta, only a select number of customers will be able to buy and sell Ethereum-based NFTs with ETH payments. The company plans to integrate other blockchains in the future, as well as add some unique features that allow for more user engagement.
The real question is whether the NFT market will succeed, said John Todaro, a senior research analyst at Needham & Company.
Coinbase is facing competition not only from OpenSea and LookingRare, which dominate the market, but also from major crypto exchanges FTX.US and Binance, which also launched the NFT market last year.
Todaro said Needham & Company issued a note stating that, once scaled, Coinbase’s NFT market is very likely to gradually increase in revenue.
“We are still bullish on the stock, we think it’s fundamentally attractive. If they can scale, I think it will really add to the stock.”
In a report published in February, JMP Group also indicated that Coinbase could benefit from the NFT market in the long run.
The company is investing in a number of areas that may not have much of an immediate impact, but will contribute significantly to long-term revenue, including the upcoming NFT platform, the report said.
Jeff Dorman, co-founder and chief investment officer of crypto asset management firm Arca, also said that it is still too early for Coinbase’s NFT market to prove its worth to investors.
“As NFT as a whole is not yet universally loved or accepted by TradFi, we believe you will need to see real traction for several quarters before any equity analyst gives Coinbase credit for it. ,” he shared via email.
Additionally, Todaro said that Coinbase’s stock performance over the past few months also reflects broader market trends. He pointed out that interest rates have affected tech stocks in general and, more specifically, retail cryptocurrencies, and trading volumes have declined.
“So investors are also trying to understand, are we in a new environment here where retail crypto trading activity is much lower than in 2021,” he said. speak.