Alibaba's Fines, CoinBase IPO and the Fall of India

The week started with a number of negative news for individual countries and companies. India has suffered the most at the country level. Indian stocks tumbled on Monday (Sensex fell 3.4%) as rising Covid-19 cases continue to weigh on investor sentiment. India has registered 168,912 new Covid cases in the past 24 hours, the sixth record increase in seven days. That does not stop religious pilgrims from mass bathing in the Ganges with all that it implies. In general, there is enough reason to expect the continuation of the sell-off in the Indian stock market.

Although the presence of the grounds does not at all guarantee the fact of movement in the direction of the grounds. Consider Alibaba for example. China imposed a record $2.8 billion fine on Alibaba Group Holding Ltd. (nearly double the previous record high in 2015 when US chipmaker Qualcomm Inc. was hit) after antitrust investigations revealed Alibaba was abusing its market dominance. The penalty itself is a record one, and for the company itself the amount is quite significant, since it is 12% of net profit. It would seem worthwhile to expect sales. Instead, the stock rallied nearly 10%.

In general, market sentiment continues to be in the zone of heightened optimism. The US stock market continues to churn out records. And in the cryptocurrency market, everyone is at a low start and is waiting for the go-ahead from CoinBase for a new leap up. We are talking about the much-hyped and long-awaited IPO of the largest cryptocurrency exchange in the United States (it will be listed on Nasdaq on April 14 under the ticker “COIN”). Preliminary capitalization estimates are around $100 billion, making this IPO one of the largest in history.

The most likely scenario for the development of events is a sharp rise in prices. The cryptocurrency market in general feels too good (doubled in the last couple of months) and CoinBase in particular (as expected, by the end of the first quarter, revenues will be almost twice as high as in THE WHOLE OF 2020). But if the IPO fails, it could be a signal for a bubble to burst in the cryptocurrency market. In the end, behind all this growth, one should not forget that the cryptocurrency market is a big price bubble that will invariably burst - it's only a matter of time.