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Why Coinbase, Block, Robinhood, PayPal Are All Down 40+% From 52-Week Highs

By Chris MacDonald and Eric Bleeker – Updated Jan 3, 2022 at 4:01PM

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This crypto sell-off isn't taking any prisoners.

This crytpocurrency correction has been widespread. However, other crypto-adjacent companies have also seen selling. In this episode of "The Crypto Show" from Backstage Pass, recorded on Dec. 15, contributor Chris MacDonald and The Motley Fool's Eric Bleeker discuss what's driving moves in Coinbase Global (COIN -8.16%)Block (SQ -6.21%)Robinhood Markets (HOOD -4.39%), and PayPal Holdings (PYPL -3.10%).

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Eric Bleeker: We have the crypto correction, some crypto-adjacent stocks: Coinbase, 40 percent off its 52-week highs. I think Square has now officially changed its name to Block, 41 percent off 52-week highs. Robinhood, 59 percent off 52-week highs; and PayPal, 40 percent off 52 week highs. Pretty narrow band there. You can see exactly what's happening. Chris, do you have any thoughts on these crypto-adjacent stocks before we look at cryptos themselves?

Chris MacDonald: Yeah, I think it's interesting. I'm not going to give away too much, but I think we're going to touch on leverage a little bit, leverage to underlying crypto prices with certain crypto-adjacent companies, in another segment later on. I do think it's interesting that these declines that we're seeing, they're pretty widespread right now, and companies that really rely on the price of Bitcoin, or at least transaction volume-related to Bitcoin and interest in this segment, are getting hit hard with this downturn. I think it's probably understandable, but it's definitely something to keep an eye on.

Eric Bleeker: We've mentioned all the time on the show, but it's to be expected to have more volatility in the crypto space. You touched on one of the systemic reasons for that with is the leverage employed across the crypto space. In addition to that, you look at all of these companies that are off, it follows really outsized gains for years. Generally, with stocks you don't see a uniform period that's too easy. A huge part of it is finding companies with competitive advantages with great business models, and being able to withstand these levels of pain.

Chris MacDonald has no position in any of the stocks mentioned. Eric Bleeker owns Bitcoin and Block, Inc. The Motley Fool owns and recommends Bitcoin, Block, Inc., Coinbase Global, Inc., and PayPal Holdings. The Motley Fool recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool has a disclosure policy.

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