Coinbase Shares Fall 31% in Q1 as Crypto Market Faces Economic Headwinds

TLDR

• Coinbase shares have fallen approximately 31%, marking their worst performance since the FTX collapse in late 2022
• Bitcoin has dropped over 10% this quarter while Ethereum has plummeted about 45%
• The crypto downturn correlates with economic concerns, including Trump’s trade war and recession fears
• Crypto-linked stocks are experiencing sharper declines than Bitcoin itself due to higher volatility
• Gold has emerged as the preferred hedge against risk, seeing its best quarterly return since 1986

Coinbase (COIN) shares have plunged about 31% this quarter, marking their steepest decline since the FTX exchange collapsed in late 2022. The drop extends a four-day losing streak that has seen the stock close at $172.23, down 1% in Monday’s session.

This downturn isn’t isolated to Coinbase. Nearly every major crypto-linked stock has tumbled alongside it. Bitcoin miners have been hit especially hard, with Core Scientific (CORZ) dropping 48% and Riot Platforms (RIOT) falling over 30%.

Bitcoin itself has retreated more than 10% during the quarter. This marks one of its weakest performances despite still showing a 16% gain over the past year. Ethereum has fared even worse, crashing approximately 45% year-to-date to around $1,800.

The crypto market’s struggles come amid growing economic concerns. President Donald Trump’s escalating global trade war has sparked fears about its impact on the U.S. economy. These worries intensified after recent economic data deepened recession concerns.

Investors have rapidly fled from risky assets. Cryptocurrency and related stocks, known for their volatility, have been among the first casualties. This pattern mirrors broader market trends, with the S&P 500 heading toward its worst quarter since mid-2022.

Coinbase faces extra pressure due to its revenue model. The exchange earns from trading volumes across multiple tokens. This includes altcoins like Ethereum that have sold off even faster than Bitcoin.

“Many people in the community understand that this is not driven by fundamental reasons,” said Oppenheimer analyst Owen Lau. “This is mainly driven by the macro reasons because of the tariffs, potential trade war, people worried about a recession coming in.”

Crypto-linked stocks carry higher risk than Bitcoin itself. An investment in a company adds the threat of bankruptcy, making these stocks prone to sell off even faster during economic uncertainty.

Post-Inauguration Reality Check

The current market climate presents a stark contrast to early 2025. Optimism ran high after Trump’s election, with Bitcoin hitting a record above $109,000 on Inauguration Day in January. The price has since fallen to around $82,000.

Gold has emerged as the main hedge against current risks. The precious metal has seen its best quarterly return since 1986, reaching new all-time highs. This challenges the narrative of Bitcoin as “digital gold.”

Trump’s actions on crypto have disappointed some industry optimists. Bitcoin dropped earlier this month after he created a strategic reserve of the token. The plan did not authorize using taxpayer money to expand it, falling short of the industry’s wildest hopes.

Most crypto-linked stocks have given up their post-election gains. Michael Saylor’s Strategy (MSTR) stands as one of the few still in the green since November 5.

Technical indicators for Coinbase paint a concerning picture. The stock has retreated within a descending broadening formation since last November. The 50-day moving average appears poised to cross below the 200-day moving average, forming a bearish “death cross” pattern.

Major support levels to watch include $146, near last year’s September swing low. If selling continues below this point, the stock could drop to around $115. Resistance levels to monitor include $206, near the March countertrend peak.

Analysts warn more challenges may lie ahead. President Trump’s “Liberation Day” approaches on April 2, when aggressive tariffs are set to take effect. These could further pressure risk assets like cryptocurrencies.

Despite these market struggles, the crypto industry continues gaining influence in Washington. It’s moving closer to integration with traditional finance. However, this progress hasn’t translated into a market rebound yet.

“What we saw a couple months ago, I don’t know how much crazier it can get than that,” said Connor Loewen, a cryptocurrency analyst at 3iQ, referring to the previous investor enthusiasm. “I think we’re going to have to be looking for new catalysts.”