Top Cryptocurrency Exchange Queen Piece (NASDAQ: currency) Once again watching the fluctuations of the market. As of 12:30 PM ET, Coinbase stock is down 1.6% from yesterday’s close, while the overall cryptocurrency market is down 0.7% over the past 24 hours.
Earlier today, Coinbase rose as much as 3.5% in early trading, after news came yesterday that Coinbase will acquire crypto-futures exchange, FairX. This acquisition will allow cryptocurrency derivatives to be traded on Coinbase in the US
Coinbase stock initially rose in pre-market trading and continued to trade positively this morning, until risk-off sentiment once again took over tech stocks and the cryptocurrency market in late morning trading.
This acquisition announcement is significant news for Coinbase, a trading platform that has so far offered limited investment opportunities to cryptocurrency traders. The addition of futures and other derivative products could lead to a more compelling use case for Coinbase among cryptocurrency traders.
As a cryptocurrency exchange that generates the majority of its revenue from transaction fees, this acquisition could significantly increase transaction volumes on Coinbase. Of course, gaining regulatory approval and providing a transparent derivatives marketplace for institutional and individual investors sounds great. However, in practice, whether or not this acquisition has been completed is a key question that many investors may be asking today.
Additionally, market-driven moves across most risky assets this afternoon have been bearish so far. Coinbase stock remains sensitive to cryptocurrency price movements, and today most of the major cryptocurrencies are trending lower.
The long-term revolutionary idea with Coinbase is that this company can become a true one-stop shop for cryptocurrency investors and traders. This announced acquisition certainly has the potential to bolster this thesis among the bulls in the long run at Coinbase.
This does not mean that this transaction is not without risks. A myriad of issues can present themselves on the road to integration. However, those who hold Coinbase clearly do not view this transaction as a reason to sell today. Instead, it appears that market-related issues are playing a role in driving the price action today with this coin.
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