Coinbase stock fell to an all-time low on Friday, just two days after the cryptocurrency exchange launched its long-anticipated NFT marketplace. Shares on Nasdaq slid to $131.14 in after-hours trading, down more than 15% since the marketplace’s beta launch.
The launch, hyped for over a year, failed to reverse Coinbase’s months-long stock slump. Since January, the stock has shed 47.61%. Even in a difficult year for crypto trading, that dwarfs 16.39% YTD losses for Bitcoin and 21.13% for Ethereum.
On Thursday, JPMorgan analyst Kenneth Worthington cut his price target for COIN by 31%, to $258. Explaining the call in a note to clients, he wrote: “The crypto markets are in need of some excitement in terms of new products and/or new use cases to continue to drive the crypto markets to becoming more mainstream, thus driving activity levels.”
It seems, at least for now, that Coinbase’s NFT marketplace has failed to generate much excitement. The platform joins a crowded ecosystem of that includes OpenSea, Rarible, Foundation, SuperRare, LooksRare, and Nifty Gateway, among others. (NFTs are unique blockchain tokens that prove ownership of a digital asset.)
Coinbase’s marketplace differentiates itself from competitors' by emphasizing communal experience, encouraging NFT artists and buyers to interact and connect with social features, akin to Instagram. The platform, which aggregates any NFTs for sale on the Ethereum blockchain across marketplaces, is still limited-access and slowly opening to its millions-long waitlist. It does not yet support in-platform NFT minting or other blockchain platforms besides Ethereum, but plans to at an unspecified date.
The launch, initially planned for late 2021, also comes at a time when the red-hot NFT market of last year appears to be cooling. But despite Coinbase’s late entry to NFTs, the exchange’s bet on community engagement also comes at a time when NFTs have steadily grown in utility, beyond status symbols to community-building tools.