What happened
Shares of cryptocurrency giant Coinbase Global (COIN 0.56%) fell as much as 5.3% in trading on Wednesday after a data glitch hit the company. Shares are down 0.8% as of 2:50 p.m. ET.
So what
There was a pricing glitch that temporarily showed astronomical gains in some accounts. Twitter was abuzz on Tuesday with posts of people having multimillion-dollar accounts in their Coinbase Wallets.
Image source: Getty Images.
As funny as the glitch was, Coinbase is relied upon for reliable data by investors who are collectively moving billions of dollars of cryptocurrency around every day. If the company's information isn't reliable they could move that money elsewhere.
Now what
It hasn't helped Coinbase that the crypto market, in general, was down today. Coinbase makes money on volatility, not necessarily the direction of cryptocurrency values, but falling valuations are generally seen as bad news for the company.
While both the falling value of cryptocurrencies over the last few weeks and the data glitch are generally bad news for Coinbase, I don't think they fundamentally undermine the company's business or its strong position in the market. This is still a great infrastructure company in the world of cryptocurrencies and that will be a valuable place to be for everyone building in this industry. Coinbase's stock may be down, but the future is still bright for this company.
