Coinbase shares are now down more than 75% this year and are trading almost 85% below the highest price ever from November. The shares have lost more than half of their value in the last week alone.
The fall in Coinbase’s stock coincides with the massive fall in the value of bitcoin, ethereum and other cryptocurrencies in recent months. Coinbase said in its earnings report that approximately 48% of transaction revenues came from bitcoin and ethereum in the quarter.
As a result of volatility, Coinbase reported sharp declines in users, trading volume and assets from the fourth quarter.
The company said that “in the event of a bankruptcy, the cryptocurrencies we hold in custody on behalf of our clients may be subject to bankruptcy proceedings and such clients may be treated as our general unsecured creditors.”
This would mean that customers would not have access to funds if Coinbase declared bankruptcy.
Armstrong wrote that the company was required to include the bankruptcy warning language due to “a recently required disclosure for public companies holding third-party cryptocurrencies” as a result of SEC rules.
Coinbase said in its earnings report that the ad “resulted in significant improvements in our brand awareness, favoritism and consideration.”
However, none of this has been enough to stop the massive fall in Coinbase’s shares.