Coinbase, one of the most popular cryptocurrency exchanges, went public on April 14th through a direct listing on the NAsdaq. Cryptocurrency investors were ecstatic as they watched the stock price soar to an all-time high of $429.54 on its first day of trading. At a market capitalization of $85.
8 billion, Coinbase is now the largest U.S. tech IPO since Facebook in 2012.
While Coinbase’s public debut was a momentous event for the cryptocurrency industry, some investors are wondering if it’s a good idea to buy the stock. After all, Coinbase doesn’t pay dividends and it’s not clear how profitable the company will be in the long run.
So, is Coinbase a good investment? Let’s take a closer look.
Coinbase went public at a time when Bitcoin and other cryptocurrencies are experiencing a resurgence in popularity. Thanks to a combination of institutional adoption and mainstream interest, Bitcoin’s price has risen sharply over the past year and is now trading at around $60,000 per coin.
Ethereum, the second-largest cryptocurrency by market capitalization, has also seen its price skyrocket in recent months and is currently trading above $2,000 per coin.
The rising prices of Bitcoin and Ethereum have helped to drive up Coinbase’s revenue and profit in recent years. In 2020, Coinbase generated $1.
8 billion in revenue, which was an increase of nearly 400% from the previous year. The company’s net income also surged to $322 million last year, up from just $52 million in 2019.
So far in 2021, Coinbase’s revenue has continued to grow at an impressive rate. In the first quarter of 2021, revenue reached $1.
8 billion, which was up another 168% from the same quarter last year. The company’s net income also rose to $771 million in the first quarter, up from $32 million in the same period last year.
The rapid growth in Coinbase’s revenue and profit is largely due to the rising prices of Bitcoin and Ethereum. However, it’s worth noting that Coinbase doesn’t just facilitate trades of these two cryptocurrencies; it also allows users to buy and sell other digital assets such as Litecoin, Bitcoin Cash, and Chainlink.
In total, there are currently more than 50 different cryptocurrencies available on Coinbase.
One thing that makes Coinbase unique is that it offers both a retail brokerage platform (Coinbase Consumer) and an institutional trading platform (Coinbase Pro). The company recently launched a new product called Coinbase Prime that is specifically designed for institutional investors such as hedge funds and family offices.
Coinbase has been able to grow its business at an impressive rate thanks to its strong focus on security and compliance. The company has built up a reputation as one of the most trusted names in cryptocurrency and has won over many institutional investors who are looking for a safe and reliable way to trade digital assets.
In addition to its focus on security, Coinbase has also made it easy for users to buy and sell cryptocurrencies by offering both a website and mobile app that are easy to use. The company also offers customer support 24 hours a day, 7 days a week – something that is essential for attracting mainstream users who may not be familiar with how cryptocurrency works.
Looking ahead, there is no doubt that Coinbase will continue to benefit from the rising popularity of Bitcoin and Ethereum. However, it remains to be seen how profitable the company will be in the long run given its relatively high expenses .
For now though , Coinbase looks like a good investment for those who believe in the future of cryptocurrency .