Coinbase Ipo: Your Guide To Investing In The Crypto Exchange

Coinbase is a major US-based cryptocurrency exchange that went public in 2021, marking a milestone in the world of cryptocurrencies as the first pure-play crypto trading company to list on a US exchange. Coinbase shares can be bought and sold on the Nasdaq exchange under the ticker symbol COIN. The company offers an exchange to make it easy for the average investor to buy cryptocurrency, as well as a digital wallet to store it in. Coinbase's revenue is linked to cryptocurrency trading volume, which means that its revenue is susceptible to fluctuations in the crypto market. Coinbase's basic platform has been criticised for its complex fee structure, which calculates fees based on a mix of trader location, payment method, order size and market conditions.

Coinbase's IPO is a risky buy

Secondly, Coinbase's valuation is high compared to traditional stock exchanges. Some analysts argue that the company has little chance of meeting future profit expectations, and its share price could be extremely volatile. Coinbase's direct listing means there is no underwriter to determine a target price range, leaving the share price entirely at the mercy of market demand.

Thirdly, Coinbase is susceptible to security risks due to its decentralised nature. While it has implemented measures to mitigate this issue, it may still be more vulnerable to hacking than traditional banks.

Finally, Coinbase's success is closely tied to the performance of cryptocurrencies, particularly Bitcoin and Ethereum, which are highly volatile and speculative. An extended downturn in the crypto market could negatively impact Coinbase's revenue and share price.

Therefore, while Coinbase offers an attractive opportunity for risk-friendly investors, it may not be a suitable investment for those with a more conservative approach.

Coinbase's business model

The company charges a commission fee for its users to use its platform, and its users can trade with leverage. It has two accounts: regular and pro. The regular account charges higher commissions, while the company's pro account has lower commission fees for users.

Coinbase also makes money through its credit card. The card is free for customers to acquire and use. Coinbase makes money whenever a customer uses that card, more precisely through the payment fee that is charged.

Coinbase offers a variety of courses about new cryptocurrencies, such as Dai or EOS. Upon completion of a course, users will receive these currencies as a reward.

Coinbase offers a whole suite of other products to both consumers and businesses alike. Under Coinbase Commerce, the company also offers tools for other companies to accept digital currency payments.

Coinbase's revenue model primarily moves around three main streams: transaction revenues, which by far represent the largest income source, subscription and services revenue, and other revenues (crypto-asset sales revenue and corporate interest income).

How to buy Coinbase stock

Coinbase is a major US-based cryptocurrency exchange that went public in 2021. Coinbase stock gives investors exposure to the cryptocurrency market without directly investing in cryptocurrency.

• Research the future of cryptocurrency: Your investment's potential success is tied to the popularity and trading volume of cryptocurrencies. Do you believe there is a future for cryptocurrencies like Bitcoin and Ethereum? Do you believe it is the "future of money" as Coinbase states on its website?
• Understand Coinbase's role in the future of crypto: If you believe there is a future for cryptocurrencies, the next step is to ask yourself if Coinbase is positioned to capitalise on cryptocurrency's popularity. This is where investors might perform an analysis, studying the company's revenue, earnings, user growth, competition, management, and other factors.
• Decide how much to invest in Coinbase: When it comes to investing in Coinbase, the same rules apply as for buying equity in any company. There is inherent risk, so only invest an amount you can afford to lose. Don't invest cash that you might need in the near future.
• Open a brokerage account: You will need a brokerage account to buy stocks like Coinbase. Brokerage accounts also offer access to other investments like mutual funds, bonds, and exchange-traded funds. The process of opening an account only takes a few minutes, and once the account is funded, you can place your Coinbase order on the broker's website or trading platform.
• Search for Coinbase stock: Search for Coinbase stock within your brokerage account platform using the symbol "COIN".
• Decide how much you want to buy: You can decide how much to buy in dollars or shares.

It is important to note that Coinbase stock can be volatile, as the company's revenue is linked to cryptocurrency trading volume. In addition, Coinbase's revenue is derived from transaction fees, which are impacted by the volume of cryptocurrency trading.

Coinbase's direct listing

Coinbase is a major US-based cryptocurrency exchange, providing a platform for crypto assets to be traded. Coinbase is also a broker for bitcoin, bitcoin cash, ether, and litecoin, among others.

The direct listing of Coinbase on the NASDAQ is a significant event for the cryptocurrency industry, reflecting the growing mainstream adoption of bitcoin and other cryptocurrencies. It is also a "seminal" moment, as it provides a way for investors to gain exposure to the cryptocurrency market without directly investing in it.

Overall, Coinbase's direct listing is a notable event, providing investors with an opportunity to invest in the cryptocurrency market indirectly. However, it is important to carefully consider the risks associated with the volatility of the crypto market and the potential impact on Coinbase's revenue and share price.

Coinbase's security protocols

Coinbase offers a range of security protocols to protect its users' accounts and assets. Here are some of the key features:

Password Security

Coinbase implements strong password requirements to ensure account security. Users are advised to keep their passwords secure and to report any suspicious or unauthorized transactions. Coinbase also offers two-step verification for added security.

Device and Account Security

Coinbase monitors device and account activity for any signs of unusual activity. Users receive device confirmation emails, and can lock or unlock their accounts as needed. Coinbase also provides guidance on how to identify and report phishing sites, technical support scams, and other fraudulent activities.

Data Privacy

Coinbase provides users with access to their privacy settings and the ability to make data requests. The company outlines how it uses customer information, such as IDs and bank account details, and explains the permissions required by the Coinbase mobile app.

Recovery Phrase Security

Coinbase Wallet users are provided with a recovery phrase, which serves as the master password to their wallet. It is crucial to keep this phrase safe and private, as losing it will result in losing access to your assets. Additionally, if someone else gains access to your recovery phrase, they can access your assets. Coinbase recommends writing down the phrase and storing it in multiple secure locations.

Wallet Security

Coinbase Wallet has an auto-lock feature that secures your wallet when it's not in use. Users can set the auto-lock timer to their preferred duration. Additionally, users should revoke access to their wallet from any decentralized applications (dapps) they are not using.

Network Security

Coinbase warns users against using public Wi-Fi networks for transactions due to the risk of cybercriminal activity. Public networks are susceptible to "man-in-the-middle" attacks, where an unauthorized entity intercepts data transmitted over the network. Coinbase provides guidance on identifying and protecting yourself from such attacks.

Transaction Security

Coinbase Wallet offers transaction transparency by showing users which assets a dapp is requesting access to. It also provides transaction previews, giving users an estimate of how token balances will change before confirming a transaction. Additionally, Coinbase maintains a dapp blocklist to protect users from malicious applications.

Advanced Security Features

Coinbase Wallet supports multiple addresses, allowing users to keep their assets and web3 identities separate. It also offers permission management, making it easy to review and revoke dapp connections to minimize potential vulnerabilities.

Frequently asked questions