(Bloomberg) — Coinbase Global Inc., the largest public digital-asset exchange in the US, is trailing behind meme cryptocurrency Dogecoin in terms of market value.
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The exchange now has about $8 billion in market capitalization while the value of Dogecoin — originally created as a joke in 2013 — is topping $9 billion. The measurement does not necessarily reflect the intrinsic worth of those projects, but it may show how a meme coin can outperform the shares of a major US-based exchange amid a highly volatile market.
Coinbase has been among the hardest hit crypto firms as investors yank coins off exchanges or exit the asset class as a whole. The exchange has laid off more than 18% of its workforce, or the equivalent of roughly 1,200 this year. Chief Financial Officer Alesia Haas said the firm is preparing for 2023 with a more conservative bias.
“Coinbase is tied to the fortunes of the broader crypto markets.” said Michael Safai, partner at crypto trading firm Dexterity Capital. “Dogecoin has no real connection to the macro, but instead is driven almost primarily by headlines and hype, retail investors seem to be hungry for one last pop.”
Its shares have tumbled by about 86% in 2022. Coinbase dropped 3.9% to a record low of $35.17 Monday in New York.
Dogecoin saw a substantial rebound since billionaire Elon Musk acquired Twitter in October, but has dipped along with the broad crypto market due to the implosion of exchange FTX.
“I don’t think there’s a tremendous amount of substance to be gleaned from the fact that Dogecoin has surpassed Coinbase in terms of market capitalization – except to say that the crypto market is very much in flux right now,” said Jacob Sansbury, chief executive officer at online trading platform Pluto. “It’s in such flux that good projects are down bad while sillier ones are doing relatively well.”
Dogecoin saw a historic surge earlier last year as Musk said Tesla’s customers could make purchases of the electric cars by the token. The coin, among a variety of other doge-themed cryptocurrencies and meme stocks, started being widely traded across trading platforms including Binance and Coinbase.
“Dogecoin was a simple, straightforward joke that punches above its pay grade all the way to become a heavyweight champion,” said Teong Hng, chief executive officer of crypto investment firm Satori Research.
(Updates to add Coinbase trading. An earlier version corrected year of Dogecoin’s historic surge.)
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