Coinbase Plunges as Bitcoin Drops

CRYPTO
Coinbase Plunges as Bitcoin Drops

Coinbase’s stock has plunged nearly 33% in two weeks, dropping to around $201 as Bitcoin tumbled 17% to $79,000 before rebounding to $84,000. Analysts point to Bitcoin’s strong correlation with Coinbase’s market performance. Other fintech stocks, like Robinhood, have also suffered, with a 30% drop to $46.

The broader market is under pressure, with Trump imposing tariffs on major trading partners. The Nasdaq has fallen 7% since mid-February, and the S&P 500 is down 4%. Oppenheimer attributes Coinbase’s decline to macroeconomic factors rather than company-specific issues.

This downturn contrasts with Coinbase’s December peak of $343, fueled by optimism around Trump’s pro-crypto stance. Bitcoin soared past $105,000, and Coinbase’s CEO, Brian Armstrong, embraced Trump’s support. However, despite a strong 2024, Coinbase’s trading revenue in early 2025 suggests stagnation, raising concerns about future growth amid market volatility.

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ECONOMY
Atlanta Fed Signals Economic Contraction

The Atlanta Fed’s GDPNow tracker signals a 1.5% contraction in U.S. GDP for Q1 2025, reflecting a slowdown in economic growth. The estimate, volatile early in the quarter, aligns with weakening economic indicators. January’s severe weather dampened consumer spending, while weak exports further pressured GDP projections. Initially forecasting 2.3% growth, the tracker has steadily declined.

Commerce Department data revealed a 0.2% drop in personal spending, adjusted to a 0.5% decline when accounting for inflation, cutting GDP expectations by a full percentage point. Net exports also dragged growth down, with contributions falling sharply.

Concerns over consumer confidence, inflation, and labor market weakness have heightened uncertainty. Bond markets signal slower growth, with Treasury yield inversions historically predicting recessions. Amid market volatility, investors anticipate the Fed will respond with multiple interest rate cuts, with a June cut probability rising to 80%. Analysts warn that complacency in asset markets may soon be disrupted.

TECH
Nvidia Earnings Hint at Recovery

Nvidia’s latest earnings report, released on February 26, 2025, has sparked cautious optimism among investors and analysts, signaling a potential recovery for the tech giant and its "Magnificent Seven" peers. Despite a year marked by volatility, Nvidia’s stock remained flat post-earnings, a performance that stood out against earlier steep declines—like the $589 billion single-day market value loss earlier in February.

This stabilization, reported widely on February 27, suggests to some that the worst may be over for the megacap tech sector. Analysts interpret this as a possible bottoming out, hinting at renewed investor interest in high-growth tech stocks. Nvidia’s 78% revenue surge underscored its AI dominance, even as margins dipped due to Blackwell chip production costs. If this trend holds, it could reignite momentum across the "Magnificent Seven," which have faced scrutiny amid a broader market correction, offering a glimmer of hope for a tech rebound.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.