Please ensure Javascript is enabled for purposes of website accessibility

Why Coinbase Stock Rebounded Today

By Joe Tenebruso - May 13, 2022 at 5:32PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A closely followed fund manager added to her stake in the crypto exchange leader.

What happened

Shares of Coinbase Global (COIN -9.09%) rallied 16% on Friday after cryptocurrencies like Bitcoin (BTC 3.58%) and Ethereum (ETH 5.67%) recovered some of their recent losses.

So what 

Coinbase's stock price has historically been correlated to large price swings in the crypto market. That proved true again this week when Coinbase's shares were hit hard after the prices of many cryptoassets plunged following the collapse of the popular stablecoin project Terra (LUNA -3.58%).

Today, the crypto market is experiencing a bit of a rebound. And Coinbase's stock is rallying alongside it.

A person is using a cryptocurrency trading app on a mobile phone.

Image source: Getty Images.

Coinbase's share price likely also received a boost from the news that widely followed fund manager Cathie Wood was scooping up more of the digital asset exchange operator's stock during its recent swoon. The founder and CEO of Ark Investment Management bought roughly $30 million worth of Coinbase stock for Ark's funds on Wednesday.

Now what

As one of the world's largest digital trading platforms and a leading investor in blockchain-focused start-ups, Coinbase's future is innately tied to the health of the crypto market. Its stock price is thus likely to remain volatile as it's largely influenced by the gyrations in cryptocurrency prices.

However, the company's leadership team believes that Coinbase's long-term success will be more closely tied to the rising adoption of blockchain technology. CEO Brian Armstrong sees the growing usage of cryptocurrency beyond simply for trading purposes as a powerful growth driver. And Wood's recent stock purchases suggest she shares Armstrong's perspective on the crypto industry's future.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Coinbase Global, Inc. Stock Quote
Coinbase Global, Inc.
$61.70 (-9.09%) $-6.17
Bitcoin Stock Quote
$30,641.75 (3.58%) $1,059.97
Ethereum Stock Quote
$2,111.25 (5.67%) $113.31
Terra Stock Quote
$0.00 (-3.58%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.