If you are following the financial news recently, you’ve likely read about cryptocurrencies. Although it has been around for years it is growing in popularity lately. One of the most popular cryptocurrencies is Bitcoin (BTC) but there are many others you can invest in. Since it is the oldest, it is also very popular.
With growing interest and investment in cryptocurrencies, there was a need for a trading platform that allowed investors to purchase and sell cryptocurrency. This is where Coinbase makes the transaction possible. It is the largest cryptocurrency exchange in the United States. The company accepted 50 digital currencies on the platform. It levies fees for depositing funds and trading which is its primary source of revenue. The transaction fees from trading and storage services accounted for 90% of the revenue for the company in 2020.
Are you looking to own a part of the company by investing in the stock? Here’s how you can go about it.
Step 1: Finding a broker that offers Coinbase stock
The first step to invest in Coinbase stock is to look for online brokerages that offer the stock and this is easy to do so. It will not take long to find a broker that allows you to buy the stock. Let us take a look at the different investment platforms that you can consider for buying Coinbase stock immediately.
A user-friendly platform and ideal for beginners, Robinhood is free to sign up and you also get a share of stock after you complete the application. It offers premium features for $5 a month including access to Morningstar research which can aid in making better financial decisions. It supports cryptocurrencies and allows the purchase of fractional shares. The best feature of Robinhood is that the stock purchases are commission-free.
Stash is another great platform if you are a beginner. You can start building a stock portfolio with ease and invest in stocks, mutual funds, and ETFs. It has three fee options to choose from. You can start with the base for $1 which includes a $1,000 life insurance policy and a debit card. Further, for $3 you get a retirement account, and for $9, you get access to everything including custodial accounts and a monthly market insight report. Stash also offers fractional shares.
The best option for those who are in the stock market to buy and hold for the long term, M1 Finance allows you to customize the portfolio and build one with stocks, ETFs, and mutual funds. Remember, M1 Finance is not for those who are into buying and selling and nor for the newbies. The platform will not offer a lot of support in terms of investment advice. Hence, you will have to make your own decisions. You can pick from an individual, joint taxable, retirement, and trust accounts. Enjoy the premium version by paying $125 annually and you also get a custodial account. It offers fractional shares and all the purchases are commission-free. There is a minimum of $100 for taxable accounts and $500 for retirement accounts.
Coinbase was founded by Fred Ersham and Brian Armstrong in 2012. It is a decentralized company that has become a focal point of the crypto economy. The mission of the company is to build an open financial system through the power of digital assets. It is a remote-first company and has no physical headquarters. Coinbase has more than 43 million users across the world with more than $456 billion transactions completed to date.
It is present in more than 100 countries and has 115,000 ecosystem partners. From the inception of the company to today, Coinbase has generated more than $3 billion in revenue from the transaction fees earned from the trades. Its market cap is estimated to be close to $2 trillion and investing in Coin stock is a chance to cash in on the crypto wave.
Its initial public offering (IPO) was highly anticipated by Wall Street. Coinbase IPO debuted on the stock market through a direct listing in April 2021 in NASDAQ under the ticker symbol COIN.
Coinbase price history
Coinbase has been making a lot of noise lately and for the right reasons. If you did not get a chance to invest in Coinbase, you can grab the opportunity now. The stock is trading around $227 today. Its all-time high is $429 and the stock has the potential to go higher in the coming years.
If you had invested $1,000 in April 2021 for $381 a share, you would have received close to 2 shares. In the initial months, it was trading around $414 and you would have had an opportunity to make the most of the high. The stock value may have declined today but it has the potential to grow in the future. The investment would be worth $444 today.
Coinbase dividend information
Coinbase does not pay any dividends and has not paid in the past. Investors should not expect any dividend payout soon.
Best features of Coinbase Stock
When it comes to a cryptocurrency exchange, there is Coinbase and then everything else. The majority of Americans who are in the crypto market have used Coinbase. The second popular platform is Binance. Not all stock trading platforms provide access to crypto coins but Coinbase Global also offers a crypto wallet to store digital assets.
Strong growth potential. The sentiment related to cryptocurrencies is highly positive and as people gain awareness about what they are, there will be an increase in investment. A lot of people are only aware of Bitcoin today but with growing awareness about other types of cryptocurrencies, there is huge growth potential. The market is massive and Coinbase has already made its presence felt here. It has played a significant role in making digital currencies accessible to the public and when investors consider buying cryptocurrencies, the first thing that will come to mind is Coinbase. It will become the best exchange to gain exposure in the expansion of the crypto ecosystem.
Stable fundamentals. Coinbase went public this year and there is only one report it has filed for the public. The company generated a revenue of $1.8 billion in the first quarter of 2021 and the net revenue stood at $1.6 billion. Out of this, $1.5 billion is the transaction revenue and $56.4 million is the services and subscription revenue. The company ended the quarter with cash and cash equivalents of $1.98 billion. Coinbase looks well-positioned in the market today and as it increases the product offering, it will continue to attract investors to the platform and this will generate revenue in the form of fees and subscriptions.
Growing user base. The awareness and importance of cryptocurrency are still growing and the company will be able to make the most of the growth and adoption of technologies like the innovations in DeFi and NFTs. Its user base has increased 64% since March 2020. There is ample opportunity to benefit from the transformation and Coinbase can benefit from its status as an important element of the financial infrastructure for the ecosystem. It is expected that the company will see near-time continued growth in the users which will drive organic growth for the business. As users grow, the transactions increase and the revenue will rise.
Volatility drives the business. Interestingly, for Coinbase, the volatility is what drives the business. The up and down of Bitcoin and Ethereum will not matter but people buying and selling Bitcoin will generate revenue. So volatility is good for the company and it has been making money from it. Despite the competition, Coinbase has managed to hold a strong place in the U.S. crypto exchange.
Service and subscription revenue. The major source of revenue for Coinbase is the fees it earns on the trades but it also generates revenue from the non-trading activities, that is, the subscription and service revenue. As the business rolls out ancillary services with time, it will see growth in the business.
New initiatives will drive highly stable and recurring revenue streams. For example, Coinbase allows you to earn free crypto in the rewards section. When you complete the educational content about cryptocurrencies, you get free crypto. Its other businesses include Coinbase commerce which provides retailers with software that allows them to accept payments in cryptocurrency. Then there is the Coinbase card which is in the early stages of providing users with a Visa debit card to spend the cryptocurrencies by converting crypto into U.S. dollars.
Lastly, it has its very own cryptocurrency known as USD Coin (USDC) and it is built on an Ethereum platform. The value of the coin is tied to the U.S. dollar. With these alternative sources of revenue, Coinbase has a long way to go and it is offering unique solutions to invest and use cryptocurrency.
Step 3: Open a brokerage account & buy Coinbase shares
You are now ready to open an account and get into investing in Coinbase stock. You can begin with a platform like Robinhood that also offers cryptocurrencies. Open the Robinhood website and click on sign up.
Here you need to click on “Claim your free stock now.” After you do so, you will have to provide your details including the name, email, and password to open an account. Once done, click on continue.
On the next page, you will have to provide further details like your birthdate, social security number, and citizenship status. Now answer further questions about your experience in investing.
You will also need to provide details about your employment and whether you are a family member or a 10% shareholder of a traded company.
At the last step, you will have to fund the account. You can do it immediately by linking it to the bank account or do it later. Purchase Coinbase stock after funding the account.
How much were Coinbase shares when the company first went public?
Coinbase shares were priced at $381 in the direct listing in April 2021.
How much does it cost to buy Coinbase shares today?
It costs $228 to buy Coinbase stock as of June 24, 2021.
Does Coinbase pay dividends?
Coinbase does not pay cash dividends.
What is the minimum number of Coinbase shares that I can buy?
You can buy Coinbase shares in the form of fractional shares for as low as $1 but it depends on the brokerage you choose.
The bottom line
If you do not want to invest in cryptocurrency, you can invest in the platform that makes it all possible. Coinbase has huge market potential and opportunity to grow in the coming months. The company only went public this year so there is a lot to look forward to and any dip in the stock is a chance to buy. You can buy a fractional share or a full share. However, you need to keep in mind that the stock market is volatile and it is due to the volatility that you see the ups and downs in the stock price. Keep the risk associated with regulators and crypto assets in mind. Buying Coinbase looks like a great long-term play keeping the cryptocurrency market in mind.
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