Developments in the cryptocurrency market continue to attract attention. Accordingly, the COIN price fell slightly below $200 on May 16. Coinbase has become the undisputed most important crypto player in the US this year; because numerous ETF providers, including BlackRock, have chosen this platform as the custodian of their Bitcoin exchange-traded funds.
Coinbase and the US Market
When the general bull run in the market was added to this, positive price movements came to the fore for COIN shares, and at the beginning of this year, the COIN price rose above $250. However, COIN experienced a sharp decline on May 16, perhaps due to increasing competition in local territories. The company led by Brian Armstrong has become a kind of monopoly on the Bitcoin ETF custody front, as it is among the few publicly traded crypto exchanges mostly in the US.
This benefited the company in the first quarter of 2024 when ETF funds were launched, and the first-quarter report exceeded expectations, reporting a massive 72% revenue increase. Naturally, this situation also affected Coinbase’s shares; at the beginning of the year, it rose from approximately $156 to $280, a peak of several months at the end of March, benefiting from the broader revival in the crypto market and Bitcoin’s new ATH refresh.
However, COIN started to pull back along with the rest of the market in April and May but still maintained a healthy level above $200. This changed yesterday when shares fell 9.43%, dropping from $215 to $199.
Why is the COIN Price Dropping?
The most likely reason for this process is not related to market movements; Bitcoin rose and soared above $66,500, the highest level in 3 weeks. In fact, this may be related to the upcoming competition on the spot trade front in the US. The CME Group, generally known for its participation in futures Bitcoin and Ethereum trading, outlined its initial plans to offer spot Bitcoin trading services.
Given that CME is a well-established player in the traditional finance field and has a rich history in the crypto space, such a potential launch could take market share away from dominant forces like Coinbase and Binance. Additionally, Cathie Wood’s Ark Invest has been gradually disposing of COIN shares over the past few weeks, increasing the selling pressure.
