Why Coinbase Fell 20.5% in May
Shares of Coinbase Globa; (NASDAQ: COIN) fell 20.5% in May, according to data from S&P Global Market Intelligence. The ascendant cryptocurrency exchange had gone public in April to much fanfare, but ran into a double-whammy of falling cryptocurrency prices and investor skepticism over high-multiple growth stocks in May. This was in spite of a first-quarter earnings report that showed booming revenue growth and profitability.
During the first quarter, Coinbase reported some ridiculous growth figures amid high-profile crypto buy-ins from the likes of Tesla CEO Elon Musk, who bought $1.5 billion in Bitcoin (CRYPTO: BTC) in February with Tesla's corporate cash. Also in the first quarter, investment bank Morgan Stanley became the first large U.S. bank to offer crypto funds to its wealth management clients. While the asset is only available to Morgan's wealthy clients, the first endorsement by a large U.S. banking institution was another sign of Bitcoin's potential as a legitimate institutional asset class.
Coinbase's first-quarter earnings report reflected this big institutional buy-in:
Source Fool.com
