Coinbase Global‘s (COIN -0.60%) Monday got off to a roaring start before investors began selling off the shares again. Early on, the cryptocurrency exchange operator benefited from the rise of Bitcoin (BTC 3.34%) above a psychologically important price level; for the most part, though, such assets are still shivering as they come to grips with being stuck in the crypto winter.
On the first day of the trading week, Bitcoin inched up past the $20,000 mark; in late afternoon trading, it had crawled nearly 1% higher over the preceding 24 hours.
Levels like $20,000 aren’t necessarily significant in and of themselves, but because they are very round numbers that many investors find comforting. Over the weekend, investors had pushed Bitcoin’s price down to nearly $19,500.
Other coins and tokens also did relatively well on Monday. Ethereum, also a top asset traded through Coinbase, was rising by over 4%, while others like Cardano and Shiba Inu were notching more-modest gains.
Coinbase is only an exchange operator and not a coin/token itself. Although it can benefit from quick, knee-jerk reactions to events like Bitcoin crossing the $20,000 river again, its ultimate gains are not immediate.
Compounding that, one of Monday’s top movers for stocks and cryptocurrencies came from Federal Reserve Chairman Jerome Powell on Friday, when he indicated that the monetary authority would continue to raise interest rates. Investors likely had this in mind when they started to reverse Coinbase’s gains Monday.
Powell is aiming to fight inflation, but increased interest rates usually drain money away from assets that many believe to be more speculative. And you can bet that if much of the investing world considers cryptocurrencies to be speculative, that goes double for the stocks in companies that specialize in trading them.
Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool has a disclosure policy.