Coinbase (NASDSAQ:COIN) stock is soaring today, up nearly 17% after disclosing it had no exposure to a number of bankrupt firms. The cryptocurrency trading platform seems to have been caught in an updraft hitting the crypto market today.
This morning, the no. 2 crypto exchange by market capitalization issued a blog post revealing it wasn’t subject to losses resulting from the recent bankruptcy claims from three major crypto firms.
Indeed, on July 14, crypto lender Celsius Network filed for Chapter 11 in New York. The firm, known for its high-yield savings accounts, is the third crypto firm to file for bankruptcy in just the past few months. Fellow crypto lender Voyager Digital filed for bankruptcy earlier this month. Meanwhile, Singapore-based Three Arrows Capital, a crypto hedge fund, was ordered to liquidate in late June.
As such, Coinbase’s announcement this morning likely came as a breath of fresh air for COIN investors. In the blog post, Coinbase leadership iterated its focus on risk management, especially compared to the now bankrupt crypto operators.
“Many of these firms were overleveraged with short term liabilities mismatched against longer duration illiquid assets. We believe these market participants were caught up in the frenzy of a crypto bull market and forgot the basics of risk management. … We have not engaged in these types of risky lending practices and instead have focused on building our financing business with prudence and deliberate focus on the client.”
COIN Stock Soars as Crypto Enjoys Long-Awaited Boom
Coinbase stock is enjoying its strongest day in recent memory, largely on the back of strong crypto performance. Crypto has been on a notable cold streak this year. The tech-stock pullback and recession fears haven’t boded well for digital assets. Some major coins have lost more than half their value just seven months into the year. Today, however, it seems market winds are blowing more favorably.
Cryptos are largely in the green today, bolstered in no small part by flagship digital currency Bitcoin (BTC-USD). BTC-USD was trending around $24,195 per coin this morning, its highest level in more than a month. It has since receded somewhat, now hovering around $23,600. However, that is still up more than 1% on the day.
Tech stocks, which have historically trended closely with crypto, are also doing well today. The tech-centric Nasdaq Composite is up about 1% heading into the afternoon.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.