Should You Buy Coinbase Stock As Bitcoin Prices Stabilize?

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You’ll have to weigh the perks and quirks of Coinbase stock before buying. If you’ve been buying cryptos, you may have been getting it using Coinbase. As for COIN stock, it’s somewhat surprising that the stock has fallen despite the crypto mania in the last few weeks. A high valuation and fears of higher competition and falling margins are catching up with COIN stock.

Getty Images Coinbase, the largest U.S. cryptocurrency exchange, has seen its stock price decline by over 30% since its mid-April IPO, trading at just about $225 per share. Firstly, the price for bellwether cryptocurrency Bitcoin has declined from levels of around $62,000 in mid-April to just about $33,000 as of Wednesday, and this, in turn, is impacting sentiment around Coinbase stock. Secondly, Coinbase went public via a direct listing, that enables early investors to sell shares on the first day of trading without the typical IPO lockup period and this also likely put pressure on the stock.

While the stock is up by about 8% over the last week, it still remains down by about 21% since it was listed publicly in April. Aside from the fast-growing crypto market, Coinbase itself is also rapidly growing. The company ended the first quarter of 2021 with 6.1 million monthly transacting users. And the amount of assets trading on Coinbase’s platform is now $223 billion, representing 11.3% crypto asset market share. Coinbase’s top and bottom lines are also moving in the right direction.

You collect a nice fat premium, thanks to high volatility, and if the stock drops to your price, you are contracted to buy it. In this case, you will own the stock at the price you want and get to keep the premium, too. The first thing to know is options on new stock issues like Coinbase carry certain risks, including volatility, as market makers and traders grapple with its interest and trading patterns. Finviz.comLike other companies in the crypto sector, Coinbase progress slowed by the drop in Bitcoin price. Notably, when Coinbase was listed, the price of Bitcoin hit an all-time high of $64,800. According to consensus data by Bloomberg, the exchange is projected to record $1.85 billion in revenue, while adjusted earnings per share are expected to be $2.48.

It uses the current share price and divides it by the total earnings per share for the last 12 months. Market capitalization is the total market value of all issued shares of a company. It is calculated by the formula multiplying the number of shares in the company outstanding by the market price of one share.

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That’s changed now, and options on Coinbase are available for trading this week. Analysts, on average, expect the company to report $2.71 a share profit on sales of $1.73 billion. Getty Images Bitcoin prices have recovered considerably, rising by over 50% since July 20, to almost $45,000, approaching the highest levels in over two months. The rally is likely driven by short covering as well as indicators that the U.S. SEC is increasingly open to allowing Bitcoin exchange-traded funds, a development that could possibly help to take the crypto to a broader base of investors. We think that the current Bitcoin rally bodes well for Coinbase, the largest U.S. cryptocurrency exchange, for a couple of reasons.

According to him, the SEC is threatening legal action if the company moves forward with options to offer yields on crypto. Coinbase is building the cryptoeconomy — a more fair, accessible, efficient, and transparent financial system enabled by crypto. The company started in 2012 with the radical idea that anyone, anywhere, should be able to easily and securely send and receive Bitcoin. Today, we offer a trusted and easy-to-use platform for accessing the broader cryptoeconomy. The Style Scores are a complementary set of indicators to use alongside the Zacks Rank.

Coinbase reviewed insider sales of Slack, Roblox, Asana, and Palantir, and calculated what percentage of their individual holdings they’d sold after those companies went public. Direct listings can be considered a liquidity event for insiders to cash in their stock. Silicon Valley icon Marc Andreeseen — one titular half of venture capital giant Andreessen Horowitz — has sold over $188 million worth of Coinbase shares in the past month, more than any insider.

Markets have lost love with almost everything with a “traditional” tag. Whether it’s banks, mainstream automakers, or exchanges, investors have showered love to their new-age peers namely fintech companies, electric vehicle companies, and crypto exchanges. Based on the 2022 consensus revenue estimates of $4.82 billion, it’s valued at around 12x of the expected 2022 sales. The multiples are way above what other “mainstream” exchanges like Nasdaq trade at. Most of the companies that went public over the last year have performed poorly this year.

This adds up when there are more than $223 billion assets on the platform. There has also never been a better time in all of history to be an individual investor. Commission fees have never been this low and multiple options allow a retail investor to get started on their DIY portfolio quickly and hassle-free. Shares of crypto exchange Coinbase rose 7 percent Wednesday morning after the company reported better-than-expected second quarter profits.

We’ll be helping you navigate the waters of cryptocurrency and ensure that you get the best results and outcomes possible. Ruby is a writer for Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She is currently studying Psychology at the University of Winchester. On Friday, Coinbase stock rallied almost 2% and the price of Bitcoin reached an all-time high of $50,900 in the morning trade. These huge gains follow from a year of great performance however, the stock currently trades at only 40% off it’s all-time high.

Worthington’s bullish view on Coinbase puts him in the majority on Wall Street, as 12 of the 16 analysts surveyed by FactSet have the equivalent of buy ratings on the stock. It is still on track to close below the $250 reference price, when it went public last month, for the seventh straight session. Worthington initiated coverage of Coinbase with an overweight rating and a stock price target of $371, which is about 55% above current levels. The deal between Bullish, which plans to launch a more user-friendly cryptocurrency exchange this year, and Far Peak Acquisition Corp. is expected to close by the end of 2021.

Among the 17 analysts covering the stock, 14 have rated it as a buy or some equivalent. Four analysts have a hold rating, while one analyst has a sell rating. But the company’s second quarter results show Coinbase customers are increasingly investing in a wider variety of digital coins.

Global topped Wall Street forecasts for sales and profits in the second quarter, as trading volume and transaction revenue continued to build. The stock fell in after-hours trading Tuesday, reflecting a muted third-quarter outlook from the company, but have rebounded in the early hours of Wednesday. And finally, it’s usually wise to wait at least a few quarters after a company goes public before you invest in it.

There is ample evidence that cryptocurrency is here to stay and it could become a major currency in the next five years. This will push COIN stock higher and it could hold a strong position in the market. Coinbase enjoys an early mover advantage and it has made the process of crypto investing quick and simple for new investors. Coinbase has simplified the process of buying and selling cryptocurrencies and garnered a massive user base. The first crypto-focused company came with an IPO at the right time.