Paul Vigna

speaker

1,291 appearances 13 recordings 1 series first heard Jul 2017 last heard Apr 2022

Paul Vigna’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Why Crypto Stocks Are Performing Worse Than Cryptocurrencies · 21 Apr 2022 podcast

I think between what they've raised, what they have profited, they were very profitable last year.

They're really trying to build out the platform.

And they said this year, we're going to spend a lot of money to do that.

And depending upon how trading goes, we may or may not be profitable this year.

After they said that, analysts started slashing their expectations for Coinbase's profits this year.

So that's what you see going on there.

It's played a big role, actually.

It's played a really big role.

The problem for the cryptocurrency stocks is that not only are they being affected by that trend in cryptocurrencies, but they're being affected by that trend in the stock market.

So it's almost like a double feedback loop.

And I think that is a big reason why the stock prices have been cratering so much more than just the cryptocurrencies.

Over the last, oh, I'd say six to nine months, you have seen an increasing correlation between cryptocurrencies and tech stocks, meaning that they trade in the same direction.

Again, the magnitudes are different.

Bitcoin can go up or down much more than any tech stock is going to go up or down on a percentage basis.

But the magnitude is the same.

And the reason, briefly, is that over the last couple of years, a lot of people who have traditionally traded stocks have started trading cryptocurrencies.

And what you're seeing is that people are starting to, you know, if you have a broad portfolio, where you would slot cryptocurrencies in is in the more risky part of your portfolio.

So they trade a lot like growth stocks, a lot like tech companies.

So when tech companies started falling earlier this year, you saw cryptocurrencies start falling.

And that's sort of the overarching directional trend.

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