When Bitcoin corrected heavily in the past weekend, it took Coinbase, a cryptocurrency exchange platform, down with it. Might investors count on the stock bouncing back to the key $350 level?
Amid the euphoria in cryptocurrency, Coinbase traded at around $340 - $350 after the first day of trade. Buying pressure eased in the months that followed. COIN stock found support at $220.
By mid-October, buying momentum for Bitcoin and other cryptos like Shibu Inu increased again. In hindsight, Coinbase stock peaked at around $360. The stock needs more than Bitcoin volatility to trade at higher levels. In the third quarter, it posted earnings of $1.62. revenue more than tripled to 315.9% to $1.31 billion. Still, at a market capitalization of almost $60 billion, shares trade at a 10 times sales multiple.
Coinbase offers tutorials and trainer videos for crypto investors. This may attract new customers but hardly offers the company a strong moat. Furthermore, the business cannot handle customer growth. The platform needs to increase customer support levels to improve customer satisfaction levels. Account hacking is an ongoing risk. Coin must spend more on securing accounts. It may have a secure platform but it must educate its users from such risks.
Coinbase could rebound. So might Bitcoin. Predicting Bitcoin’s price is impossible. That means investors should consider trading COIN stock.
