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Should I Invest in Coinbase Stock?

Summary: This article will answer all of your Coinbase questions and why Coinbase is an excellent investment for your future.

Coinbase Global, Inc.
company nameCoinbase Global, Inc.
sectorTechnology
industrySoftware—Application
address1209 Orange Street Wilmington, Wilmington, DE, United States
countryUnited States
websitehttp://www.coinbase.com

Chances are, you’ve heard of Coinbase before. Maybe you even exchange cryptocurrency on their platform. But did you know that Coinbase can also be a fantastic investment opportunity?

If you are looking for a new investment opportunity or are entirely new to investing, Coinbase could be an excellent choice to secure your financial future.

We will explain exactly Coinbase, how they got started, and a handy pros and cons list to help you make an informed decision about your finances.

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What is Coinbase?

You might ask yourself - what is Coinbase?

It’s simple. Coinbase is an all-inclusive online platform for all of your digital currency needs, whether you are buying, selling, or trading. 

Completely secure, it is one of the leading online platforms to help you with your day-to-day cryptocurrency needs.

Coinbase was founded in 2012 when digital currency was starting to make an appearance. Founded by Brian Armstrong and his roommate in their shared San Francisco flat, the company has steadily been growing and has recently gone public on the U.S stock exchange.

Coinbase plans on being the top cryptocurrency platform and has made significant impacts in the digital currency arena. 

Who Are the Key People on the Management Team?

Before you invest in ANYTHING, it is essential to research who you are investing in.

Starting at the top, the CEO of Coinbase is Brian Armstrong. 

Armstrong started Coinbase in 2012 to make Bitcoin widely available to the masses. He graduated from Rice University with a Master’s in computer science and has since worked for several companies before founding Coinbase.

The rest of the executive team consists of Emilie Choi, Surojit Chatterjee, Alesia Haas, L.J. Brock, Paul Grewal, and Manish Gupta.

Other Things To Know Before Investing

1. Coinbase is the first digital currency company to go public in the U.S stock market. The company went public on April 14, 2021, and was valued at $99.6 Billion or $381 per share.

2. They have one of the largest libraries of digital currencies, far expanding beyond Bitcoin.

3. Coinbase stock prices are heavily linked to Bitcoin prices, a pro and a con.

Bull Case

Let’s talk about the bull case argument. If you are new to investing, a bull case, or bull market, is, generally speaking, a good market.

A bull market typically improves, usually by the increase of the value of a company’s stocks. It is usually understood that these increases will be long-term and points to a strong company economy.

There is a solid bull case to be made for Coinbase, as the company has a lot to offer, not just in stock prices. A bull case is essentially the pro list of why you should invest in Coinbase.

1. Coinbase is, of course, based on the assumption that digital currency is here to stay and will continue to gain value. This is great as it means Coinbase is also here to stay and grow in value.

Specifically, Coinbase relies heavily on Bitcoin. Arguably, Bitcoin has already shown a lot of potential, with many more possible opportunities. It is still a relatively new sphere with a potentially bright future ahead.

2. Coinbase plans on being the top face in digital currency; the potential next Amazon. Like Amazon branched out into Kindle, Prime, etc., Coinbase could also branch out into different cryptocurrency spaces.

3. It is possible for Coinbase to bring their operating margins up to 50%, where all the other heavy hitters are at. Is it likely? Only time will tell.

4. Coinbase has grown at an alarming rate. Currently, they are slated to bring in $5.1 billion for 2021. That’s a 302% growth from last year.

Bear Case

On the other hand, a bear market is the exact opposite of a bull market. A bear market is in a state of decline with little chance of recovery. 

Typically, stock prices are continuously dropping, layoffs occur at the company, and investors panic. This leads to even more of a decline.

When there is a bull case to be made, there is also a bear case. Think of the bear case of Coinbase as the con list.

1. Coinbase’s value is based on the assumption that digital currency is here to stay and will continue to gain value. 

Confused? We know we listed this also as a pro, but the truth is that no one knows the future of cryptocurrency. If digital currency disappeared tomorrow, Coinbase is essentially worthless as they based their entire platform on it.

As discussed above, Bitcoin is still relatively new. It has its risk factors that could influence Coinbase.

2. There is potential speculation that operating margins will plateau far below the rates of any other company. Other companies' margins tend to stabilize between 50%-60%. 

Coinbase is expected to stop at 30%, potentially putting Coinbase at a severe disadvantage compared to others.

3. There have been some security concerns and scandals involving Coinbase.

Micheal Pierre, based in New York, was hacked in the summer of 2020. After receiving a strange text, he was unable to log into his Coinbase account. Shortly after, Pierre was told by Coinbase that the hackers had emptied his account.

He lost $100,000, which would now have a value of $400,000. According to Pierre, he was not offered any assistance from Coinbase and is deeply concerned about security.

4. There was too much overhype and excitement when Coinbase went public, leaving it impossible for people and investors not to be disappointed. Too many great expectations.

This put a damper on stock prices shortly after.

Coinbase Competitors

VVOYAGER DIGITAL LTD
$13.31
SymbolVYGVF
Price$13.31
Change$0.2050
Change %1.56%
Volume$1,043,309.00
Marketcap2.16B
FFinTech Acquisition Corp. V
$10.04
SymbolFTCV
Price$10.04
Change$0.0100
Change %0.10%
Volume$769,840.00
Marketcap343.23M

Final Verdict

Coinbase has excellent potential to be a great investment opportunity, whether you plan on maybe buying a house or retiring early.

While Coinbase is still in the early stages in the stock market, there is a lot to be said for its incredible growth and future potential.

Having reviewed both the bull and the bear case, there are pros and cons to investing in Coinbase. It is up to you to weigh both cases and make an informed decision about your investment future.

Should you invest $1,000 in Coinbase, Inc. right now?

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