Wells Fargo to Sell Coinbase Stock COIN Plunges by 3percent Immediately
Categories: Crypto News
Wells Fargo to SellCoinbase Stock, COIN Plunges by 3% Immediately
One of theworld's biggest financial holdings, Wells Fargo, stated that it would sell Coinbaseshares due to increased competition and macro pressure on the market. Theinstitutional giant's decision caused an immediate COIN stock plunge in thepre-market trading session.
Macropressure on market
Sincereaching its ATH in November, the digital assets market lost around $2 trillionin capitalization, which is why most assets lost up to 75% of their value,including Bitcoin and Ethereum.
With theprofitability of digital assets decreasing exponentially, retail traders and investorsavoid receiving exposure to cryptocurrencies and often withdraw theirfunds from centralized cryptocurrency exchanges, causing a negative netflow.
One of thebiggest cryptocurrency exchanges in the world, Coinbase was affected themost by the correction on the digital assets market, which is why holding itthrough a bear market might be problematic even for such a large institutionlike Wells Fargo.
Unfortunately,the macro pressure on the cryptocurrency market will most likely hold throughthe end of 2022, as will the continuing monetary policy tightening. The marketstill expects yet another rate hike at November's FOMC meeting.
Risingcompetition
Coinbaseremains the most dominant cryptocurrency exchange in the United Statesdespite the crypto crash. However, it still faces a large competition as bothcentralized and decentralized exchanges aim to take some of the market sharefrom the monopolist.
Wells Fargomost likely expects the appearance of more products similar to Coinbase thatwill offer users fewer regulated services and more benefits that the biggestexchange in the U.S. simply cannot compete with due to its large market shareand regulatory oversight.
ArmanShirinyan is a trader, crypto enthusiast and SMM expert with more than fouryears of experience.Arman strongly believes that cryptocurrencies and theblockchain will be of constant use in the future. Currently, he focuses onnews, articles with deep analysis of crypto projects and technical analysis ofcryptocurrency trading pairs.