Bitcoin crash crushes Coinbase. Stocks are dropping again
Coinbase stock is now down more than 75% this year and is trading 85% below its all-time high since November. Stocks have lost more than half their value in the past week alone.
As a result of the volatility, Coinbase reported a sharp decline in the number of users, trading volume, and assets from the fourth quarter.
“In the event of bankruptcy, crypto assets that we hold on behalf of our clients may be subject to bankruptcy proceedings and such clients may be treated as generally unsecured creditors,” the company said.
This could mean that customers will not be able to access the funds if Coinbase declares bankruptcy.
Armstrong wrote that the company was required to include bankruptcy warning language due to “newly required disclosure of public companies holding crypto assets to third parties” as a result of SEC rules.
Coinbase said in its earnings report that the announcement “led to significant improvements in our brand awareness, preference and buying thinking.”
However, none of this was enough to stop the massive slide in Coinbase stock.