The crypto marketplace is currently experiencing an upswing as prices for many coins reach all-time highs and the popularity of cryptocurrencies like Bitcoin and Ethereum increases significantly. Coinbase Global is at the forefront of this growing industry and many are wondering if now is the right time to invest in Coinbase’s IPO.
Coinbase Global released its direct listing on April 14 at a price of $250 per share. At that point, the stock rose nearly 72% to 429.54 and closed its first day of trading at 328.8, representing a valuation of $87.3 billion.
Wedbush analyst Dan Ives opines:
Coinbase is an essential component of the crypto ecosystem and a barometer of growing mainstream adoption of bitcoin and crypto in the coming years.
Coinbase’s IPO is a potential game changer for the crypto industry. It can be used to gauge investor appetite and make predictions about market activity.
How does Coinbase make money?
Coinbase is the largest US cryptocurrency exchange, offering around 50 different currencies for trading. These currencies include Bitcoin and Ethereum – the two market leaders.
Bitcoin has the highest market value and is up 2% this year after its value fell in recent months. Ethereum has more than doubled in value in 2021.
Coinbase charges a percentage fee on all deposited funds or trades. About 90% of the company’s revenue comes from these fees.
Is it worth buying the stock?
On Friday, Coinbase shares rose nearly 2% and the bitcoin price hit an all-time high of $50,900 in morning trading. These huge gains follow a year of great performance. However, the stock is currently trading just 40% away from its all-time high.
However, it is versume that a new base could form very soon, which would represent the first buy point for the stock.
To gauge the stock’s fundamental and technical metrics, it’s a good idea to take a look at Coinbase’s IBD Composite Rating. A weak IBD Composite Rating is normal for new issues. Currently, Coinbase’s IBD Composite Rating stands at 76 (out of 99). It may be a good idea for investors to wait for this rating to increase before investing in the stock.
It’s also predicted that Coinbase stock could be pressured by platforms like PayPal as cryptocurrencies continue to gain popularity. The platform uses crypto trading products as its main source of revenue. However, companies like PayPal use them as engagement tools. This gives Paypal and other such companies the opportunity to test new strategies. They could potentially eclipse the platform.
There’s no doubt this stock is promising. Traders should wait to buy until the stock reaches its first buy point and gets a higher IBD Composite Rating. With cryptocurrencies performing so well, that buy point is definitely approaching. Traders should keep an eye on the latest news from Coinbase.