Coinbase is down! Is it time to buy Coinbase?
πππ$Coinbase Global, Inc.(COIN)$
It could be the case of Buy the Rumour, Sell the News. There was much hype and excitement prior to the Bitcoin approval that drovr Coinbase and other crypto stocks like $Marathon Digital Holdings Inc(MARA)$ $Riot Blockchain, Inc.(RIOT)$ which went up like a rocket to the moon. Bitcoin surged past USD 45,000 but has since dropped to USD 41,621.62 currently.
The fortune of Coinbase is very much tied to Bitcoin share price. Now that Bitcoin ETFs are launched in the market, there is concern that investors will find the latter an easier way to invest in Bitcoin.
On the positive side, Coinbase is the custodian of choice for Bitcoin ETFs as Coinbase is hired as the custodian for 8 of the 11 Bitcoin ETFs. It is ironic that Bitcoin ETFs can be a competitor to Coinbase.
Coinbase to their credit have started to diversify their sources of income by shifting their revenue mode to providing more subscriptions and services rather than relying solely on transactions in addition to custody fees.
Latest news is that Spot Bitcoin ETFs pulled in USD 3.33 billion in its first 5 days of trading with $iShares Bitcoin Trust(IBIT)$ leading the group with an inflow of USD 1.2 billion since January 12 while $Fidelity Wise Origin Bitcoin Fund(FBTC)$ has grabbed USD 1.06 billion.
This is due to name recognition as Blackrock is the world's biggest ETF issuer as well as Fidelity.
Is Coinbase a Buy?
Coinbase is a volatile stock trading from a high of USD 187.39 in 2023 to a low of USD 46.43. This is due to the nature of Crypto currencies. Bitcoin is also undergoing a halving event in April 2024 where rewards for mining Bitcoin will be halved, thus ensuring limited supply.
Wall Street Analysts are mixed on Bitcoin with a Target price from a high of USD 200 to USD 54.00 according to Tipranks.
So while I am short term Bearish on Coinbase, I am also long term Bullish on Coinbase as cryptocurrencies are here to stay. This is only the start of the Cryptocurrency growth. In the future there will be other Crypto ETFs like Ethereum ETFs. Coinbase will continue to play a pivotal role in the growth of Cryptocurrencies and grow exponentially in the process.
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