What Happened?
Shares of cryptocurrency exchange Coinbase (NASDAQ:COIN) jumped 28.6% in the afternoon session after stocks rallied as Republican party candidate Donald Trump was declared the winner of the 2024 US presidential election.
The market is trying to assess the impact of some of the anticipated changes under the new administration, mostly relating to trade decisions that affect semiconductor and defense stocks, regulatory measures in the crypto and energy industries, and the broader impact of new measures on key economic indicators tracked by the Fed, notably inflation.
After the election was called, Bitcoin hit a new all-time high, pushing past the critical $75k mark. The market reaction suggests investors are anticipating favorable measures. This reaction follows recent comments by Donald Trump as he pledged to make the United States the "Bitcoin superpower" of the world.
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What The Market Is Telling Us
Coinbase’s shares are extremely volatile and have had 77 moves greater than 5% over the last year. But moves this big are rare even for Coinbase and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 5.5% as stocks exposed to the cryptocurrency market soared as momentum improved. Notably, Bitcoin, the most popular crypto asset, edged past the $70,000 level, a move that could clear the way for a retest of the all-time high of $73,000 achieved in March 2024.
Also, with roughly a week until the U.S. 2024 elections, markets anticipated a potential regulatory review of the crypto space when a new administration is elected.
Overall, the sentiment suggests markets are itching for a change.
Separately, Coinbase revealed a new AI tool for creating AI-powered agents (which could include bots for trading, portfolio management, and even interacting with smart contracts) in less than three minutes. This tool was built on the Coinbase developer platform in collaboration with OpenAI—the creators of ChatGPT—and Replit, a cloud-based software development environment.
The announcement highlights the growing effort to lower the adoption barrier for users interested in building AI-driven products. It also provides analysts with more clarity when assessing how Coinbase can participate and benefit from the growing market for artificial intelligence.
Coinbase is up 60.4% since the beginning of the year, but at $251.92 per share, it is still trading 9.9% below its 52-week high of $279.71 from March 2024. Investors who bought $1,000 worth of Coinbase’s shares at the IPO in April 2021 would now be looking at an investment worth $766.54.
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