What is Coinbase, and should you invest in its IPO or not?

What Is Coinbase, And Should You Invest In Its Ipo Or Not
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What is Coinbase?

Crypto exchanges are the digital marketplaces that enable users to buy, sell and hold different crypto coins conveniently. Well, no one has ever imagined that they can do more with crypto exchanges. Coinbase has achieved a big milestone as it has enabled users to have their share in the company. Coinbase is one of the largest crypto exchanges worldwide that has announced that it has become a public company with COIN. Unlike other companies, Coinbase avoided offering a traditional IPO. Instead, it has planned to directly post the company’s shares on a popular stock exchange known as Nasdaq stock exchange through the feature of direct listing.

Coinbase has made a trendy choice or decision of positing the coin on the stock exchange. It also mentioned that the company had assisted the same non-establishment craze of cryptocurrencies in the past decade. It is yet to see the growth of bitcoin as it is not clear whether bitcoin will replace the dollar and develop into a speculative asset.

But do you know what Coinbase is exactly and what this crypto exchange does?

For instance, you want to invest in bitcoin. There are mainly two options: first is to mine bitcoin by using powerful computers required to solve the complex mathematical problems, and secondly, buy it from crypto exchanges. The mining process involves lots of stress, hard work, and money, and it requires technical knowledge as well. In contrast, in buying option, all a user needs to do is open an account with a chosen crypto exchange and buy bitcoin directly by paying from a bank or credit card.

Mining bitcoins is a difficult process, and this is the reason why most people prefer to buy bitcoin instead of missing it. When it comes to buying bitcoin, Coinbase enters as it is the world’s largest and most popular crypto. Most crypto enthusiasts prefer to buy from Coinbase as this exchange process is quite straightforward, acting as an intermediary between the buyer and seller and finding the price suitable for both. Coinbase provides a great interface for both beginners and experienced users. For experienced users, it has introduced a robust platform known as the Crypto Genius Auto-Bot, which offers an amazing set of features. Coinbase also provides free wallets to users to store their crypto coins safely.

How do crypto exchanges earn money?

How Do Crypto Exchanges Earn Money

Starting a crypto exchange is known as one of the best bitcoin business ideas in today’s time. A crypto exchange like Coinbase charges commissions and fees from users to buy and sell cryptocurrencies. Coinbase doesn’t charge fees from users to store crypto coins in the wallet that it offers. There are two main types of fees that are charged by crypto exchanges that include:

Transaction fee

It is a commission or fee that the platform charges on the bitcoin and other crypto transactions. The method of making payment and the total of the transaction depend on the user’s location.

Margin fee

The margin fee is also referred to as the spread. Crypto exchanges like Coinbase charges specific fees like 0.5% on the sale and purchase of cryptocurrencies. It is understood that the rate on all crypto exchanges varies according to the change in price and market condition. The change in the price of cryptocurrencies estimates the margin fee.

What is the worth of Coinbase?

In today’s time, it is challenging to value a start-up like Coinbase. The estimation companies state that a start-up can be accurately valued when they access investments from worldwide users. In 2018, Coinbase was valued, and it believed $300 million is right in financing. It is not yet confirmed whether when Coinbase will go public, what its value will be and how lucrative the business will be. At first, bitcoin was also not accepted by people, but in 2018, it rose to prominence for the first time, and it offered amazing returns to all investors across the world and Coinbase.

But the competition for Coinbase has increased as there have been many platforms developed that allows users to buy and sell cryptocurrencies by charging fewer fees and commissions.

Is Coinbase going public?

Initial Public Offering (IPO) is a way by which Wall Street explains that a private company is making its entrance into the stock exchange market. When any company starts with IPO, it hires investment banks that help the company to sell its share to the general public. All the investors and bankers set a specific price of IPO for every share of it.

Coinbase has observed a rise of around 4% in its stock as compared to last week. The stable market and price of cryptocurrencies have resulted in gains in the stock. However, it has also been noticed that bitcoin’s price has stabilized currently that was fluctuating a lot in the past few weeks. Coinbase is working with proper planning and is looking to supplement and stabilize the revenue streams of exchange by majorly focusing on important areas like blockchain infrastructure. Coinbase has also experienced a decline in its stock price of around 30% in April 2021, and it was last traded at $225 per share. It is yet to see whether Coinbase IPO will be profitable for investors or not.

How to Buy Coinbase IPO or stock?

Coinbase trades on only one stock exchange that is NASDAQ that allows retail investors to diversify their portfolio by buying new stock easily. All you need to do is to choose the right brokerage platform. You can consider specific factors to choose the right broker that include a trading platform, commission and fees, and easy access to the market. After that, decide on the number of shares that you want to buy or you can afford to invest in. You must be aware of order types as you will be required to choose order types. There are two different types of orders that are limit orders and market orders. At last, you can execute your trade.

Thank you for reading!