What Happened?

Shares of cryptocurrency exchange Coinbase (NASDAQ:COIN) fell 10.7% in the morning session after markets tumbled, extending the weakness from the previous week as concerns over the ongoing trade war continued to spread. Over the weekend, President Trump fielded questions regarding recession worries on FOX News, calling the market struggle "a period of transition," but that didn't do much to calm investors. The sell-off was particularly pronounced in the tech sector, with the Nasdaq falling 3% into correction territory, while the S&P 500 also posted a 2% decline. 

Separately, the company wasn't included in the list of stocks to be added to the S&P 500 which was released on March 7, 2025. Being included in the index means that the stock will likely be held by many mutual funds and ETFs, which could potentially drive up demand for the stock.

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What The Market Is Telling Us

Coinbase’s shares are extremely volatile and have had 69 moves greater than 5% over the last year. But moves this big are rare even for Coinbase and indicate this news significantly impacted the market’s perception of the business. 

The previous big move we wrote about was 13 days ago when the stock dropped 8.2% on the news that stocks tied to the crypto market fell, mirroring the weakness in digital assets. Bitcoin, the largest cryptocurrency by market cap, dropped to $87,000, a 20% decline from its all-time high of $109,114 on January 20, 2025. 

Historically, when Bitcoin stumbles, the broader crypto market takes a harder hit, and this time was no exception. With traders cashing out, cutting losses, or just waiting on the sidelines, this could translate to a slowdown in trading activity on platforms like Robinhood and Coinbase, which could impact their revenues. 

Coinbase is down 26.9% since the beginning of the year, and at $188.14 per share, it is trading 45.2% below its 52-week high of $343.62 from December 2024. Investors who bought $1,000 worth of Coinbase’s shares at the IPO in April 2021 would now be looking at an investment worth $573.11.

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