Is Coinbase (COIN) stock a buy now? Should you buy COIN stock? I provide Coinbase stock analysis from over 10 hours of due diligence. Coinbase will be a direct listing instead of an IPO on April 14 on the NASDAQ. Is COIN Stock a buy now? Can Coinbase cryptocurrency stock help boost your stock market portfolio gains? High growth investing!
Coinbase, the leading digital currency exchange, is going public through a direct listing (placeholder amount of $1,000,000,000) and Goldman Sachs is leading the offering. Coinbase will be listed on the Nasdaq under the ticker “COIN”. The company is riding a surge in the cryptocurrency market and it's been reported they just sold shares in the secondary market at ~$100B valuation, which should set the range for when they start trading. The company will be one of the most anticipated IPOs (direct listings) in recent memory given its focus on cryptocurrency.
The company’s mission is to “create an open financial system for the world” and that they are building the cryptoeconomy, which is a “more fair, accessible, efficient, and transparent financial system for the internet age that leverages crypto assets: digital assets built using blockchain technology.” Coinbase draws parallels between Google and how they democratized access to information through an easy-to-use search engine; Coinbase is democratizing access to the cryptoeconomy by offering a simple-to-use platform to invest and use crypto assets; the company is the onramp to crypto for millions of people around the world. CEO Brian Armstrong believes in a vision where cryptocurrencies have the potential to disrupt the global financial system and he states the following in his founder letter in the S-1: “The current financial system is rife with high fees, delays, unequal access, and barriers to innovation. In many countries, citizens don't have access to sound money, a functioning credit system, or even basic property rights. If the world economy ran on a common set of standards, that could not be manipulated by any company or country, the world would be a more fair and free place, and human progress would accelerate.”
Coinbase competes in a large and fragmented market that has varying levels of regulatory compliance. Coinbase states that some competitors do not adhere to their standards of regulations and can therefore attract more customers, and this is particularly true in international markets. On the retail side, they mostly compete with traditional financial technology and brokerage firms like Square, Robinhood, and PayPal, which have recently introduced crypto products and services. The company calls out Binance which they state has “varying degrees of regulatory adherence”. Kraken is another exchange competitor that is reported to be raising a large round but it's not listed as a competitor in the S-1. On the institutional side, they mostly compete with other crypto-focused companies or a few traditional financial incumbents with limited crypto products. Coinbase believes that they win due to their ecosystem, purpose-built infrastructure for crypto, significant investments in regulatory compliance and licensure, advanced cryptography and security expertise, and their emphasis on accessibility, trust, and ease of use.
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