Analyses
13
Apr
coinbase public

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Coinbase goes public

One of the biggest topics of the crypto scene in 2021 has been the listing of US-based Coinbase on the Nasdaq Stock Exchange. The timing of the listing was just perfect. Bitcoin and many other cryptocurrencies were at record levels and the crypto market got a lot of attention in the media every day. Coinbase’s stock is one of the hottest tech shares in 2021 without a doubt!

In this article, we will go through the listing of Coinbase and talk about investing in cryptocurrency companies in general. At the end of the article, you will also find options of the marketplaces where you can buy a Coinbase stock.

Investing in cryptocurrency companies and funds

Blockchain technology and cryptocurrencies can be indirectly invested through numerous exchange-listed companies. Most of the companies are listed in the stock exchanges of the United States and Canada.

Lately, many large companies have exchanged liquid cash from dollars to cryptocurrencies, mainly to Bitcoin. The most well-known examples of these are software company MicroStrategy and electric car manufacturer Tesla. Both companies are listed on Nasdaq. MicroStrategy is the largest institutional Bitcoin investor, currently owning more than 92,000 Bitcoins.

Digital payment service companies Square and Voyager Digital have also invested hundreds of millions of dollars in Bitcoin. Square is the third largest of institutional Bitcoin investors.

Many companies specializing in blockchain technology and cryptocurrency mining are also listed on the stock exchange in the United States and Canada. These actors therefore not only own currencies but their entire operation is based on cryptocurrencies. Of course, there are major changes in the value of these companies in line with the changes in the overall cryptocurrency market.

Nasdaq-listed Riot Blockchain Inc is one of the biggest winners in the wild course rally of recent months.

riot blockchain

According to the eToro investment platform, the value of the company’s share has increased by 4,994% in 12 months. The company is focused on Bitcoin mining in the United States. In November 2020, the value of the share was still below $5. The present value of the stock moves above $50.

The value of the share of Hut 8 Mining, a mining company listed in Canada, has also multiplied over the past few months. Other similar listed companies include Bifarms, Argo Blockchain, Fortress Blockchain, and DMG Blockchain Solutions. All these companies are specialized in mining cryptocurrencies and developing blockchain technology.

Coinbase is a well-performing cryptocurrency exchange

Coinbase is the world’s first publicly listed cryptocurrency exchange. The company announced its initial listing intentions in December 2020 and the listing took place on Wednesday, April 14, 2021. The shares can be found from marketplaces with a ticker COIN.

Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam. The company reached a million users was in 2014. Today, Coinbase has more than 56 million registered users all around the world.

coinbase review | coinbase experiences

In Coinbase, you can buy and sell dozens of different cryptocurrencies. You can also store your holdings on the platform.

Coinbase made strong results in 2020 and in the first quarter of 2021. In 2020, total revenue was $1.14 billion and the profit for the year was $322 million.

In the first quarter of 2021, Coinbase reported a ninefold increase in revenue, increasing from $190 million to as much as $1.8 billion. First-quarter net income increased to between $730 million and $800 million from $32 million in the same period last year.

Based on the first few months, 2021 looks like Coinbase’s all-time record year.

Coinbase as an investment

Coinbase is the largest cryptocurrency exchange in the United States. It has customers in more than 100 countries. At the time of writing, Coinbase holds more than $223 billion worth of cryptocurrencies. In the first quarter of 2021, the company had more than six million monthly transaction users. In a conclusion, we can state that Coinbase really is a giant.

In connection with the listing, Coinbase registered 115 million Class A shares known by ticker COIN. No new shares will be created, but the company will allow existing shareholders to sell their holdings to new investors.

Olaf Carlson-Wee, CEO of crypto-hedge fund Polychain Capital, has estimated Coinbase’s market value to reach more than $100 billion at the time of listing.

There are also many critics for the $100 billion estimates. David Trainer, president of New Constructs, among others, has commented that the expected casting is far too high. According to data collected by Forbes, Coinbase is valued at about $70 billion. This is based on private market transactions. This is in the ball park with Airbnb and Zoom listings.

Coinbase’s success relies largely on the general situation of the cryptocurrency market. If Bitcoin and Ethereum hit new ATH every month, it also rains down on Coinbase’s cashier. The larger the halo around the crypto market, the more transactions will be done in Coinbase exchange. More trading means more trading fees for Coinbase and, as a result, higher revenues.

When considering Coinbase’s revenues and future development, it is important to understand that Bitcoin’s price and Coinbase stock might not move hand in hand. As the price of Bitcoin plummets, trading at the Coinbase platform continues. A Bitcoin crash doesn’t automatically mean low revenues for Coinbase.

However, Coinbase is somewhat affected by the drop in the Bitcoin price. There are always fewer investors in a bear market and transaction volumes go down. Coinbase believes that the crypto market continues to grow with the help of institutional demand.

Cryptocurrencies are here to stay. There will be demand for trading platforms like Coinbase in the future. From an investment perspective, the biggest question is whether Coinbase is the best option when investing in the cryptocurrency world.

Which cryptocurrency company will be listed next?

Coinbase is the first publicly listed crypto trading platform. It won’t be the last. There will be likely other listings too. Similar cryptocurrency exchanges, which might consider listing, are Kraken, Binance, and FTX.

Binance is the most popular trading platform for cryptocurrencies. This exchange is known for its wide range of services. At Binance, you can trade many of the smallest altcoins too.

binance front

Compared to Coinbase, Binance trades almost 50 times the amount of dollars per day. The exchange’s own cryptocurrency BNB has also risen to become the third-largest cryptocurrency.

Kraken is a potential challenger for Coinbase. This U.S. cryptocurrency exchange is almost identical in terms of service. Kraken is valued approximately at $20 billion.

In addition to cryptocurrency exchanges, there are many other companies in the industry, such as wallet providers, blockchain companies, and payment developers.

Blockchain.com, Fireblocks, Anchorage, and Bitpanda have all raised huge sums of money from funding rounds. In general, there is a clear boom in the crypto market, with a lot of money flowing into companies in the industry.

Bitcoin ETF

Bitcoin ETF has been a major topic of discussion for several years. One of the biggest reasons for this is the blessing of the Canadian Financial Authority for a Bitcoin ETF.

On the stock market, ETFs are a very popular investment. The ETF is abbreviated from the words Exchange Traded Fund. In practice, an ETF makes it easy to invest in a particular industry or company.

For example, when you invest in the OMXH 25 index listed on the Helsinki Stock Exchange, you invest in the 25 largest companies. It is easy to diversify your investments through a single product. This is one of the best features of ETFs. Diversification brings stability to an investment portfolio and offers protection for unexpected collapses.

Bitcoin ETF has been a much-asked product in the market for a good reason. Institutional investors, in particular, find investing in Bitcoin difficult. There are challenges and risks involved in maintaining investments, among other things. Despite modern marketplaces, buying and selling cryptocurrencies is not as easy and safe as investing in traditional stocks.

Many U.S. institutions have invested in Bitcoin through Grayscale funds since no Bitcoin ETF is available.

Bitcoin ETF makes investing in cryptocurrencies easier for consumers and for large institutions. The investment can be made easily, for example, through your own online bank, without any stress about wallets or opening an account on a cryptocurrency exchange.

Over the years, several Bitcoin ETF applications have been made to financial authorities, but with poor success. In 2021, the Canadian financial authority finally approved the first Bitcoin ETF. It is expected that the U.S. Securities and Exchange Authority (SEC) will also soon approve the first Bitcoin ETF product for the US market.

Investing in cryptocurrencies has been possible in the Nordics through the Nordnet platform and ETN certificates. This tracker tracks the value of the underlying cryptocurrency. For example, Bitcoin. Nordnet’s offers include mini-futures as well. They make it possible to invest in cryptocurrencies with leverage.

Cryptocurrency companies are here to stay

A few years ago, investing in cryptocurrencies was considered suspicious.  No major investors believed in the future of Bitcoin or other cryptocurrencies, let alone the numerous ancillary business opportunities that cryptocurrencies entail.

Coinbase’s listing on Nasdaq is the final confirmation that cryptocurrency companies are here to stay. Coinbase is just one example, and there are plenty of exchanges in the queue that are planning a similar listing, as well as other companies in the industry.

Companies such as MicroStrategy, Tesla, and Square, which invested in Bitcoin, have creditably ensured that cryptocurrencies are constantly prominent among investors.

From an investor’s point of view, Coinbase is a very interesting investment. As this is the first trading platform for cryptocurrencies listed on the stock exchange, it also receives a lot of attention.

If you are interested in investing in Coinbase, you can do this easily through the eToro investment platform.

eToro is a globally renowned reliable and easy-to-use marketplace with all the most popular asset classes, from shares to indices and cryptocurrencies to traditional commodities.

Coinbase shares can also be bought from Binance and FTX as tokenized cryptocurrencies.

Image by Pexels from Pixabay

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