Why This Investor Is Putting Money To Work In Coinbase Stock
Strong cryptocurrency prices during the quarter drove total trading volume to a new all-time high of $462 billion, 38% more than last quarter. More importantly, Bitcoin, the bellwether cryptocurrency, appears to be headed into a bear market. Bitcoin prices are down by over 20% over the last month and remain about 30% off their all-time highs. Coinbase’s revenues are sensitive to cryptocurrency pricing, as prices influence the number of monthly transacting users on its platform and the total value of transactions. If prices continue to trend lower, this could impact Coinbase’s revenue and profitability for this year.
Analysts forecast a loss of $0.36 a share for the period on sales of $1.26 billion. Should this pace of employment continue, it could bode well for corporate earnings in the second half of the year, which has helped propel stocks to record highs. Coinbase’s stock price’s collapse has been exacerbated by the general bearishness in the cryptocurrency market. SPACs, or special-purpose acquisition companies, have become a popular vehicle to go public over the past year. Such companies are already public, and exist to merge with a private company and, in turn, take that company public.
As a result, investors were prompted to sell their crypto assets. Regulators in China have made it more difficult for businesses to provide cryptocurrency-related services. They have stated that digital currencies should not be accepted for commercial transactions. This particular headline spurred the massive sell off in the bitcoin price today.
As mentioned before, that’s about an $8 billion valuation for Coinbase. Poshmark — Shares of the online fashion marketplace plunged more than 13% despite the company reporting better-than-expected second-quarter financial results. Poshmark posted a loss of 4 cents per share on revenue of $81.8 million versus analysts’ estimate of a 6-cents per-share loss on revenue of $80.3 million.
Overall, the sentiment related to cryptocurrencies is positive with people more aware of what they are and how they operate, leading to improving acceptance. Coinbase has played a major role in making these digital currencies accessible to the general public. Because its price is closely linked to that of Bitcoin, the company is likely to recover eventually, and once the selling frenzy subsides, investors may see the stock price rise. On this news, Coinbase’s stock price declined nearly 6%, further damaging investors. 3 Tiny Stocks Primed to Explode The world’s greatest investor — Warren Buffett — has a simple formula for making big money in the markets. For stock market investors that means buying up cheap small cap stocks like these with huge upside potential.
The company intends to be the safe and regulation-compliant point of entry for retail investors and institutions into the cryptocurrency economy. About 90% of Coinbase’s revenues come from transaction revenues, which are very sensitive to the pricing trend for cryptocurrencies . As Bitcoin prices roughly doubled over Q1, the company saw a quarterly trading volume surge to about $335 billion – that’s higher than the trading volumes for the full years 2019 and 2020 combined. Now, if prices decline, MTUs and transaction volumes on the platform will likely decline sharply, hurting Coinbase.
Ark shifted some of its capital into Coinbase amid a dip in the crypto exchange provider’s stock price. Coinbase Global topped Wall Street forecasts for sales and profits in the second quarter, as trading volume and transaction revenue continued to build. The company is primarily owned by venture capital firms and the company’s upper management. Once the company goes public, retail investors will be able to buy shares of Coinbase on the public market. Investors should also know that even though Coinbase is the largest crypto exchange in the U.S., it doesn’t currently have a sustainable competitive advantage. This means users could easily shift their buying and selling from Coinbase’s exchange to another competitor.
Curiously, Coinbase felt the need to respond to online criticism about the sheer volume of insider stock sales — which seems to have inspired its share price to tank. Coinbase hit its all-time high of $428.93 about one hour after its listing. The Delaware-headquartered firm’s share price nearly halved over the following month, hitting a low of about $208 on May 19.
Bullish would be competing with Coinbase, the largest cryptocurrency exchange in the U.S., and others around the world. Regardless of what our broker says, we’re likely to avoid Coinbase until shares have had some time to trade and the dust has settled. Rather than pull a hero-or-zero on day one of trading, we’d rather slowly accumulate shares over time at decent prices.
Wood is known to back disruptive companies and was among the early backers of Tesla and Square. Cryptocurrency is among the biggest disruptions of our times even since the opinion over them is very divided. Bitcoin trades comprised 24 percent of Coinbase’s trading volumes for the quarter, down from 39 percent in the first quarter. “On the other hand, the stock will likely continue to be volatile given multiple broad factors, mostly related to the regulatory environment,” Wedbush analysts Moshe Katri, Dan Ives and Ryan Campbell added. In Coinbase’s Tuesday earnings call Chief Financial Officer Alesia Haas told investors the company is watching the SEC closely.
The sports-betting leader is one of the newest ARK Invest stocks. On March 8, ARK Invest disclosed a new position of 748,000 shares for the ARKK ETF. DraftKings stock is above its 50-day moving average, and the long-term 200-day line.
Meanwhile, Coinbase charges up to 4 percent commission for transactions on its platform. The fees are currently very lucrative and sooner or later a “Robinhood” might start a price war in the industry. While markets were ready to accept almost any multiple for growth stocks in 2020, as is visible with names like Snowflake, things have changed in 2021.
Coinbase’s stock hasn’t really tracked the recent surge in Bitcoin prices giving it some room to run. While the stock is up by about 8% over the last week, it still remains down by about 21% since it listed publicly in April. We also continue to believe that Coinbase’s valuation is attractive. Considering its current market price of $258 per share, the stock is valued at just about 34x our projected 2021 earnings estimate, despite the fact that we expect sales to rise almost 4x this year. While investors are factoring some amount of cyclicality into Coinbase’s revenues, given the nature of crypto prices, which in turn impact the company’s trading revenues, we still think the stock remains a good value. Founded in 2012, Coinbase is the leading cryptocurrency exchange platform in the United States.
Most retail investors tend to “FOMO” when they see their peers achieving short-term successes in their investments. Greed starts to creep in and they begin “over-investing” in the latest fad (Gamestop perhaps?) They don’t know when to call it quits and the ending typically isn’t a pretty one. This is exactly what is happening to cryptos at the moment which is a boon for Coinbase. Moving forward though, increasing competition could undermine its traditional revenue source which is transactional fees. Likewise, their assets on the platform are no longer the $90bn figure as at end-2020 but a mind-boggling $223bn as of the latest figure.
That market value makes Coinbase one of the biggest publicly traded U.S. companies — just 93 companies in the S&P 500 index have a higher market value. Coinbase’s value is close to the combined market value of Nasdaq Inc., which runs the Nasdaq Stock Market, and Intercontinental Exchange, which owns the New York Stock Exchange. Shares of Coinbase are listed on the Nasdaq under the ticker “COIN,” and closed at $328.28, up 31% from the $250 reference price set by Nasdaq ahead of the first trade. Coinbase Global Inc.’s initial public offering happened with cryptocurrency chatter seemingly everywhere, even at the U.S. Digital currencies are being incorporated into business plans and accepted for payment by major corporations like Tesla, PayPal and Visa.
Coinbase Global stock prediction results are shown below and presented in the form of graphs, tables and text information, divided into time intervals. For Coinbase Global stocks, the 200-day moving average is the support level today. Its Q2 numbers are proof that the company is firing on all cylinders and as BTC continues to gain, COIN stock will move higher. If you bought COIN stock then, you would be sitting on 15% gains today. COIN stock is trading close to $268 today, far from its peak of $429 but with strong potential to move upwards.