Shares of cryptocurrency exchange Coinbase Global (NASDAQ:COIN) fell almost 3% on Tuesday, following news that popular investor Cathie Wood sold shares. As reported by Markets Insider, Wood’s Ark Innovation ETF sold over 98,000 shares on Monday. However, it should be noted the fund still holds $1.1 billion in Coinbase stock.
It’s possible that Coinbase stock fell on Tuesday as a result of Wood’s action. The stock trades like a value stock even though it’s grown like crazy over the past year, suggesting the stock has few bullish advocates. Indeed, Wood has been one of the company’s few vocal supporters. So perhaps investors are viewing the decision to sell 98,000 shares as a sign that conviction is changing over at Wood’s investment management firm, Ark Invest.
The market is generally bearish on Coinbase because of its business model. Revenue is generated primarily via charging fees to retail investors for trading cryptocurrencies. Some argue that cryptocurrency trading volume will decline as the industry matures, hampering Coinbase’s lucrative revenue stream.
Whether or not that’s true, Coinbase is taking a new step to diversify its income. According to an official company blog post today, it’s launching a marketplace for trading non-fungible tokens. Once launched, this could provide Coinbase with a way to grow its business without relying too heavily on cryptocurrency trading volume.
Marketplaces for NFTs already exist, but there are a couple of reasons this new entry from Coinbase could gain momentum. For one, NFTs are purchased with cryptocurrency. Considering many people already hold cryptocurrency on Coinbase, it could reduce user friction by having NFTs on the same platform.
Moreover, Coinbase plans to incorporate social networking elements into its marketplace, allowing users to display their NFT holdings to the world. These two factors could allow Coinbase to steal market share in the space. Time will tell. For now, prospective users are encouraged to get on the waiting list.
The official launch date for Coinbase’s NFT marketplace has yet to be announced.
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