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Is now a good time to buy Coinbase stock?

Is now a good time to buy Coinbase stock?

Last updated 12th Apr 2022

The crypto marketplace is currently experiencing a surge, as prices for many coins reach all-time highs and the popularity of coins such as Bitcoin and Ethereum grows substantially. Coinbase Global is at the forefront of this growing industry and many people are wondering whether now is the right time to buy into the Coinbase IPO. 

Coinbase Global released its direct listing on April 14 at $250 a share. At this time, Coinbase stock increased nearly 72% to 429.54 before closing this first day of trading at 328.8. This made for a valuation of $87.3 billion. 

According to Wedbush analyst Dan Ives, “Coinbase is a foundational piece of the crypt ecosystem and is a barometer for the growing mainstream adoption of Bitcoin and crypto for the coming years.” The Coinbase IPO is a potential turning point for the crypto industry that can be used to gauge investor appetite and make predictions about marketplace activity. 

How does Coinbase make money?

Coinbase is the largest U.S cryptocurrency exchange that lists 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 by 2% this year, after falling in recent months. Ethereum has more than doubled its value in 2021. 

Coinbase charges a percentage fee for any deposited funds or trades. Roughly 90% of the company’s revenue comes from these fees. 

Is Coinbase a stock to buy?

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. 

However, it is thought that a new base may form very soon which would offer the stocks first buy point. 

To measure the stocks fundamental and technical metrics, you should take a look at Coinbase’s IBD Composite rating. A weak IBD Composite rating is normal for new issues. Currently, Coinbase IBD Composite rating is 76 (out of 99). For investors, it may be a good idea to wait for this rating to increase before you buy into the stock. 

It is also predicted that Coinbase stocks may face downward pressure from platforms, such as PayPal as cryptocurrencies continue to gain popularity. Coinbase used crypto trading products as the main source of revenue however, companies like PayPal use them as engagement tools. This gives Paypal, and other such companies, room to test new strategies that could potentially outshine Coinbase’s platform. 

While the Coinbase stock is certainly promising. Traders are advised to hold off from buying until the stock reaches its first buy point and receives a higher IBD Composite rating. With cryptocurrencies within Coinbase doing so well, this buy point is definitely approaching and traders should keep their eyes on the latest Coinbase news and updates.

Ruby Layram

Ruby Layram

Ruby is a writer for Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. Ruby has been a professional personal finance and investment writer for 2 years and is currently building her own portfolio of altcoins. She is currently studying Psychology at the University of Winchester, specialising in Statistical analysis.