Can Concerns About ETFs Prevent Coinbase (COIN) Stock from Reaching New All-Time Highs?

Coinbase Stock Continues to Decline Amid Bitcoin ETF Launch

Since its peak of $187, Coinbase (COIN) stock has experienced a 37.36% decrease, falling to $117 in the last 30 days. The launch of Bitcoin ETFs has contributed to this downward trend, as investors have shifted their focus to these products rather than direct exposure to BTC through exchanges due to higher fees.

The Impact of Bitcoin ETF Launch on Coinbase

The launch of the 11-Bitcoin ETF on January 11th did not lead to a new recovery phase for Bitcoin. Instead, it caused a 6.75% decline in the price of Coinbase stock. This decline has been further accelerated as potential investors opt for ETF products over direct exposure to BTC.

Analytics firm Santiment has observed a similar trend, noting a decrease in the number of Bitcoin wallets holding more than zero coins following the SEC’s approval of 11 Spot ETFs. This decline can be attributed to fear, uncertainty, and doubt among investors, as well as a diminishing interest in owning Bitcoin directly.

Decrease in Trading Volume and Revenue

The introduction of Bitcoin ETFs has also led to a decline in average daily spot trading volume on Coinbase from $2.5 billion to $1.9 billion. This decrease in trading volume will likely impact Coinbase’s revenue from Bitcoin transactions.

Future Outlook for Coinbase Stock

While the introduction of Bitcoin ETFs may impact Coinbase’s revenue, the exchange could still generate fees through providing Bitcoin custody services for ETF providers. It is too early to determine whether this will result in a substantial correction in Coinbase’s stock price. Technically, COIN’s price is maintaining support above $115 and the 50% Fibonacci retracement level, suggesting a potential opportunity for buyers to drive the price upwards.