Bitcoin’s decline in the last week, in sympathy with the stock market, gave investors an excuse to sell cryptocurrency platform stocks. Coinbase (COIN) performed poorly, as did mining firms like Hut 8 Mining (HUT) and Marathon Digital (MARA).
Coinbase is worrying investors. It is about to buy BtcTurk for over $3 billion. The acquisition will strengthen its dominance in Turkey. But the deal would break Coinbase’s record. The expensive price tag will expand Coinbase’s market share. This does not guarantee profit expansion even as revenue increases.
Coinbase can afford the acquisition while shareholders grow increasingly concerned. In the near term, the company could face regulatory scrutiny on deals of this size. Furthermore, crypto volatility may weaken trading volumes. Investors may hold their crypto assets and minimize any trading. Prices could swing too wildly, discouraging crypto investors from committing to anyone crypto asset.
Voyager Digital (VYGVF) is more vulnerable than Coinbase. Whereas Coinbase checks with regulators before introducing anything new, Voyager offers promotional deals first. The several U.S. States want to collect a fine for Voyager’s Earn Accounts offering. As a securities product, Voyager must follow securities regulations. The uncertainties sent VYGVF stock to new lows recently. This could continue until Voyager proves that its Voyager Earn Accounts are not securities or investment contracts.