Why Coinbase Stock Plunged 7.3% Today

What happened

Shares in the cryptocurrency market Coinbase Global (NASDAQ: currency) It fell as much as 7.3% in trading on Tuesday as the overall cryptocurrency market sold off. Shares were down 6.2% as of 3:05 p.m. ET.

so what

Major cryptocurrencies are down significantly today with Bitcoin (CRYPTO: BTC) And Ethereum (CRYPTO: ETH) decreases nearly 10%, while Solana (CRYPTO: SOL) It fell by over 10% for a while. Cryptocurrency drops are generally seen as bad news for Coinbase, but the company is really making money from the volatility, so today’s moves may not be all bad.

Image source: Getty Images.

Day by day, Coinbase price often moves with cryptocurrencies, but this is not how business investors should think. Coinbase is the largest crypto market today and has many growth opportunities, such as non-fungible tokens (NFTs) that we are looking forward to. Management was acquiring the NFT market, which may be the largest NFT market in the world soon after its launch with at least 2.6 million people queued to use the product.

What now

I’m dealing with high volatility in the cryptocurrency market today, which is actually beneficial for Coinbase’s business. Coinbase makes money from transactions, and given the volatility we’ve seen in cryptocurrencies, this could be a great quarter for the company. Regarding the stock, I think there is a bright future for Coinbase as more people get involved in cryptocurrency and NFT, and days like today are a buying opportunity for long-term investors.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.