Coinbase (COIN) founded in 2012, is a cryptocurrency exchange that enables hedge funds, corporations and retail users to access the cryptocurrency markets through advanced trading and custody technology. There are 56 million verified users. COIN was launched as an IPO, on 14th April, 2021, with a valuation in the order of $60+ billion making it one of the largest IPOs of all time (comparable to Facebook and Uber). The launch was not underwritten by banks with the advantage of saving money but the disadvantage, perhaps, of less scrutiny. Unlike many technology IPOs, COIN is actually profitable and has no debt.

The launch price was $381, it hit $429 on the opening day before falling back to $328. The current price is $297. The Nasdaq reference price was $250, valuing the the company conservatively at $47 billion. Analysts forecasts of share price are $479.

COIN could be a useful introduction into crypto investment for retail investors who want to trade indirectly.

Reasons for investing:

1. Crypto is undoubtedly here to stay and the use will expand.

2. COIN is a new company and may prove attractive to multiple ETFs when the price stabilises.

3. COIN could be bought up, at a premium, by a large technology company such as Apple, or, dare one say, Tesla.

Risks

1. Cryptocurrency is a volatile asset and the value of COIN is linked to crypto valuations

2. Competition from large financial trading platforms like Fidelity.

I'm thinking to taking a punt, but not at current prices. Does anyone have any opinions on COIN?


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