Coinbase: It's All Downhill From Here

Motley Fool2021-04-20

Cryptocurrency trading platform Coinbase (NASDAQ:COIN) went public last week. After a few volatile days of trading, Coinbase was valued at around $65 billion as it started its first full week as a ...

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Comments

Hayz
2021-04-21
Hayz
Yes, sliding down slowly...but with lesser volume and options coming into play. Long term looks good, as cryptos gather momentum in the long run. Perfect for parking excess funds.
Des0721
2021-04-21
Des0721
Be greedy when people are fearful
Diadem
2021-04-21
Diadem
Buy now n thank me later.
grapevine
2021-04-20
grapevine
Insightful take. Stock is basically feeding on investor hope/expectations
Pq8
2021-04-20
Pq8
High risk high return?
RTLY
2021-04-20
RTLY
High chance it will still grow [冷漠]

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After a few volatile days of trading, Coinbase was valued at around $65 billion as it started its first full week as a ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/04/20/coinbase-its-all-downhill-from-here/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"COIN","symbol_name":"Coinbase Global, Inc.","start_time":0,"source_url":"https://www.fool.com/investing/2021/04/20/coinbase-its-all-downhill-from-here/","article_id":"2128784652","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2128784652","pubTimestamp":1618919700,"columns":[],"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"So many things have to go exactly right for the cryptocurrency pioneer to succeed in the long run.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"COIN":"Coinbase Global, Inc."},"translate_title":"Coinbase：从这里开始一切都是下坡路","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"COIN":0.9},"content_text":"Cryptocurrency trading platform Coinbase (NASDAQ:COIN) went public last week. After a few volatile days of trading, Coinbase was valued at around $65 billion as it started its first full week as a publicly traded company.Coinbase generates revenue almost entirely from transaction fees. Revenue totaled about $1.3 billion in 2020, up 140% from the previous year. These transaction fees are quite lucrative: Coinbase generated net income $322 million last year.Coinbase stock trades for a price-to-sales ratio of roughly 50 and a price-to-earnings ratio of 200. If the company were, say, a subscription software provider that was expected to grow at a quick and steady pace for many years, those ratios might make sense. But given Coinbase's business model, they're just about impossible to justify.Image source: Getty Images.If cryptocurrencies go mainstream, it's bad for CoinbasePrices for cryptocurrencies are extremely volatile. That extreme volatility makes them mostly useless as real-world currencies. A business that accepts bitcoin as payment, for example, is almost certainly converting that bitcoin into dollars or another real currency immediately.For cryptocurrency to have any real utility, the volatility needs to cool off. If that were to happen, there would be little reason for masses of people to speculate on cryptocurrency prices, given that there would no longer be the potential for quick and massive returns. If speculation dies down, so does trading volume. And if trading volume drops, Coinbase's revenue craters.One reason people are willing to pay excessive fees to buy and sell cryptocurrencies are the massive price swings. 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Just like online stock trading platforms, which now largely don't charge commissions at all, it will be a race to the bottom for cryptocurrency trading platforms.Coinbase could make money in other ways, but options will be limited if cryptocurrency mostly remains a vehicle for gamblers and speculators.What Coinbase needs to happenCoinbase's business depends on people believing that cryptocurrency could one day go mainstream and have real-world utility, but for that scenario to never actually play out. That's basically the status quo today.It's like Coinbase is sitting on top of a hill. A nudge to the left – stabilizing cryptocurrency prices and real-world utility – sends Coinbase tumbling in one direction as trading volume dries up. A nudge to the right – acceptance that cryptocurrency will remain a purely speculative asset – sends Coinbase tumbling in the other direction as competition forces lower fees. It seems like a very fragile situation.And of course, cryptocurrency prices could crash, and interest from investors and speculators could vanish, without either scenario playing out. Obviously, that would also be bad for Coinbase.If you want to invest in cryptocurrency, buy cryptocurrency. As a bet on cryptocurrency's future, Coinbase stock just doesn't make much sense.","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":371578871,"gmtCreate":1618963412393,"gmtModify":1704717486267,"author":{"id":"3576709204489965","authorId":"3576709204489965","name":"Hayz","avatar":"https://static.tigerbbs.com/d87598e3b13004920f673918b320782e","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"3576709204489965","authorIdStr":"3576709204489965"},"htmlText":"Yes, sliding down slowly...but with lesser volume and options coming into play.&nbsp; Long term looks good, as cryptos gather momentum in the long run.&nbsp; Perfect for parking excess funds.","listText":"Yes, sliding down slowly...but with lesser volume and options coming into play.&nbsp; Long term looks good, as cryptos gather momentum in the long run.&nbsp; Perfect for parking excess funds.","text":"Yes, sliding down slowly...but with lesser volume and options coming into play. Long term looks good, as cryptos gather momentum in the long run. Perfect for parking excess funds.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371578871","repostId":2128784652,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371285662,"gmtCreate":1618942152256,"gmtModify":1704717284219,"author":{"id":"3581504915829508","authorId":"3581504915829508","name":"Des0721","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3581504915829508","authorIdStr":"3581504915829508"},"htmlText":"Be greedy when people are fearful","listText":"Be greedy when people are fearful","text":"Be greedy when people are fearful","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371285662","repostId":2128784652,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371239597,"gmtCreate":1618937084119,"gmtModify":1704717249593,"author":{"id":"3575708827969002","authorId":"3575708827969002","name":"Diadem","avatar":"https://static.tigerbbs.com/fa00adf5918bb0b33a9181bba4430da7","vip":1,"crmLevel":8,"crmLevelSwitch":1,"idStr":"3575708827969002","authorIdStr":"3575708827969002"},"htmlText":"Buy now n thank me later.","listText":"Buy now n thank me later.","text":"Buy now n thank me later.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371239597","repostId":2128784652,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371661693,"gmtCreate":1618931984712,"gmtModify":1704717158255,"author":{"id":"3574915270637682","authorId":"3574915270637682","name":"grapevine","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3574915270637682","authorIdStr":"3574915270637682"},"htmlText":"Insightful take. Stock is basically feeding on investor hope/expectations&nbsp;","listText":"Insightful take. Stock is basically feeding on investor hope/expectations&nbsp;","text":"Insightful take. Stock is basically feeding on investor hope/expectations","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371661693","repostId":2128784652,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371837754,"gmtCreate":1618926295878,"gmtModify":1704716989559,"author":{"id":"3581995181839462","authorId":"3581995181839462","name":"Pq8","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3581995181839462","authorIdStr":"3581995181839462"},"htmlText":"High risk high return?","listText":"High risk high return?","text":"High risk high return?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371837754","repostId":2128784652,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":371805909,"gmtCreate":1618925478201,"gmtModify":1704716957626,"author":{"id":"3580439946108420","authorId":"3580439946108420","name":"RTLY","avatar":"https://community-static.tradeup.com/news/2531345aea064118a220f0477af13a72","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3580439946108420","authorIdStr":"3580439946108420"},"htmlText":"High chance it will still grow&nbsp;[冷漠]&nbsp;","listText":"High chance it will still grow&nbsp;[冷漠]&nbsp;","text":"High chance it will still grow [冷漠]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371805909","repostId":2128784652,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":10,"commentSize":10,"repostSize":0,"favoriteSize":2,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2128784652"}