Wall Street had another down day on Tuesday, and this time, it didn't look as though the market would be able to rebound before the end of the trading session. As of 2:30 p.m. ET, the Nasdaq Composite (^IXIC -1.87%) was down almost 3% to 12,645, coming to within 100 points of its worst levels of the past year and further exacerbating the bear-market drop that the index has suffered.
Plenty of stocks in the Nasdaq have contributed to the decline, but a couple of high-profile stocks have taken much bigger hits and seen their share prices fall to unprecedented levels. Below, we'll look more closely at why Coinbase Global (COIN -3.76%) and Robinhood Markets (HOOD -2.06%) hit all-time lows on Tuesday and what the future could hold for their respective stocks.
Coinbase gets debased
Shares of Coinbase Global were down more than 4% on Tuesday. That put the stock at its lowest level ever and nearly 60% below the closing price of $304.54 per share that it set immediately after it went public a year ago today.
Coinbase's fortunes are closely tied to the cryptocurrency markets that it serves, and the news there wasn't particularly good. Most major crypto assets posted sizable declines, with even the largest seeing drops of 2% to 3% and some of the more speculative digital tokens taking bigger hits. When crypto prices are down, the investors who use Coinbase's platform to trade tend to get less excited about their markets, and that points to the potential for lower profits in the future.
More broadly, investors haven't been certain whether Coinbase has a sustainable competitive advantage over rival crypto brokers. Coinbase relies on trading revenue that, in turn, is tied to a fee structure that's higher than what some of its competitors offer. As investors in the crypto space get more sophisticated, they're less likely to stick with a high-cost broker like Coinbase unless the company can find a way to distinguish itself more fully. So far, that hasn't happened.
Coinbase hopes to continue making cryptocurrencies more a part of mainstream investing. Whether it can be an indispensable part of the ecosystem it's trying to set up, though, remains to be seen.
Robinhood isn't giving to the poor
Elsewhere, shares of Robinhood Markets were down about 3%. That sent the app-based stock-trading platform to its lowest levels ever. The share price is now approaching 90% below its top price in the week following its late July 2021 IPO.
Robinhood came onto the market at a time when stocks were generally doing well, and investors had flocked to its user-friendly app in order to take advantage of opportunities in areas including both stocks and cryptocurrencies. In the past six months, however, there's been a marked deterioration in investor sentiment, especially among the momentum-driven short-term traders who tended to use Robinhood's app the most.
Some investors are still hopeful about Robinhood's prospects. They point to the company's efforts to flesh out a more complete financial-services platform, including the ability to link bank accounts and participate in securities lending. Robinhood is also rolling out extended-hours trading in an effort to get more investors thinking about buying and selling investments during a larger part of the day -- especially during popular off-work hours.
At this point, though, Robinhood is seeing massive losses, and it's unclear whether the company will have enough access to capital to turn the corner. That's why the stock is at all-time lows, and a rebound could take a long time to materialize.