What Happened?
Shares of blockchain infrastructure company Coinbase (NASDAQ: COIN) jumped 5.1% in the afternoon session after stocks edged higher (Nasdaq +0.9%, S&P +0.6%) while momentum in the crypto space picked up amid concerns the proposed spending bill (One Big Beautiful Bill) would raise the already bloated US fiscal deficit, making it difficult to keep inflation under control.
Inflation fears, partly triggered by the ongoing trade war, have driven a demand for safe-haven assets and alternative stores of value. These concerns are fueling demand for digital assets, with Bitcoin reaching a new all-time high in May 2025. For crypto-linked stocks like Coinbase, this means more people are trading, which often translates into sales.
The shares closed the day at $258.90, up 4.9% from previous close.
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What The Market Is Telling Us
Coinbase’s shares are extremely volatile and have had 65 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock gained 6.6% on the news that stocks tied to digital assets surged as Bitcoin, the world's largest cryptocurrency by market cap, reached a new all-time high, edging past the $110,000 mark.
This rally also reflects growing investor confidence in Bitcoin's role as a potential store of value during a period of heightened market uncertainty.
Geopolitical tensions, escalating trade disputes, and ongoing concerns about U.S. debt sustainability have prompted a flight to alternative assets, with digital currencies emerging as a perceived hedge against some of these risks.
Also, rising asset prices typically improve investor confidence, prompting traders and investors to increase their participation by placing new bets or engaging in more frequent trading. This heightened trading activity translates into higher transaction volumes and more revenues for platforms like Coinbase or Robinhood that earn fees on these trades.
Coinbase is up 0.6% since the beginning of the year, but at $258.63 per share, it is still trading 24.7% 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 $787.83.
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