Shares of Coinbase Global (COIN -2.42%) have been on a wild ride today. The stock initially popped nearly 2.5% higher before later falling as much as 4%. As of 1:20 p.m. ET, shares of the cryptocurrency exchange were down 1.8%.
Investors were at first excited this morning that Coinbase's long-awaited foray into the world of non-fungible tokens (NFTs) has arrived. The company announced the beta version of the Coinbase NFT marketplace is live and open for fans of digital art to browse the company's curated offerings.
The enthusiasm faded quickly, though. Reports have been piling in that NFT mania might be starting to wear off. According to cryptocurrency and digital economy site DappRadar, sales on top NFT marketplace OpenSea are down some 67% over the last 30 days. The report also dragged down shares of Facebook parent Meta Platforms by 7% as it has also been testing out NFT sales in its metaverse apps on the Quest 2 virtual reality headset.
It is worth noting, however, that daily OpenSea sales volume was just barely over $1 million a year ago. DappRadar reports the volume was $53 million just a few days ago on April 15. Coinbase's NFT launch may have missed the recent peak NFT craze, but it could still be a lucrative market for the crypto trading service long-term.
At this juncture, Coinbase makes most of its money from the buying and selling of cryptocurrency. When the company releases its first-quarter 2022 earnings results on May 10, investors should focus on the trading volume of popular cryptos like Bitcoin and Ethereum, since that is the primary factor affecting Coinbase's revenue and profitability.
Though NFT sales are falling right now, signs point to the relative resiliency of crypto trading during the first quarter of the new year. Crypto exchange bank Silvergate Capital reported earnings yesterday, showing a 35% decline in digital currency exchange volumes in Q1 compared to peak levels in the fourth quarter of 2021.