Cryptocurrency may be the financial wave of the future, but it sure wasn’t a favored asset class on Monday. In a lowering-tide-sinks-all-boats situation, slumping cryptocurrency prices negatively affected the stock of Coinbase Global (NASDAQ:COIN), dragging the company’s share price down by more than 2% on the day.
The most direct factor in the decline of cryptocurrencies Monday seems to have been a fake news release regarding Litecoin (CRYPTO:LTC), a relatively popular and well-established altcoin, and monster retailer Walmart (NYSE:WMT).
Early Monday, a release tantalizingly headlined “Walmart Announces Major Partnership With Litecoin (LTC)” and supposedly provided by Walmart was published on Globe Newswire, a publishing platform for corporate news releases. The Litecoin Foundation, the organization behind the cryptocurrency, also tweeted a link to it.
The price of the altcoin shot up, but quickly reversed course when Globe Newswire, Walmart, and the Litecoin Foundation distanced themselves from it, with the latter pulling its linked tweet. The Litecoin Foundation also tweeted a statement characterizing the press release as “false news,” adding that it had “no information as to where this idea or the release to the press originated.”
Since Coinbase is a crypto trading platform (the crypto trading platform, according to some), its fortunes are strongly tied to the performance of the assets that move through its system. The Litecoin mini-controversy doesn’t directly affect the company’s operations, but any time general sentiment on cryptos takes a hit, that for Coinbase tends to follow.
Coinbase bulls shouldn’t be discouraged by the stock’s dip on Monday. The company still has a strong position in its market, and many consider the future of cryptocurrencies in general to be glaringly bright.
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