Is Coinbase Stock a Good Bet for Cryptocurrency Investors? – Yahoo Canada Finance

Goldman slashes year-end target for the S&P 500 by about 16% to 3,600 points
Written by Aditya Raghunath at The Motley Fool Canada
In the last two years, cryptocurrencies have taken investors on a roller-coaster ride. Led by Bitcoin, the crypto market touched record highs in November 2021 before pulling back significantly in 2022.
Despite the volatility associated with these digital assets, cryptocurrencies have always returned with a bang to touch record highs after an elongated bear market. While you can buy and hold Bitcoin and other cryptos on centralized exchanges, there are several other ways to gain exposure to this highly disruptive asset class.
For example, you can look to buy shares of Coinbase (NASDAQ:COIN), one of the world’s leading cryptocurrency exchanges. Valued at a market cap of US$17 billion, Coinbase stock is currently trading 81% below all-time highs. Let’s see if Coinbase is the ultimate contrarian bet or a value trap for equity investors right now.
The performance of Coinbase stock is closely tied to the performance of cryptocurrencies. Coinbase generates a majority of sales through exchange fees and commissions, which, in turn, are related to trading volumes. Typically, trading volumes are significantly lower during bear markets and gain pace when crypto prices move higher.
So, Coinbase managed to increase its sales from US$1.27 billion in 2020 to US$7.83 billion in 2021. Analysts now expect sales to fall by 56.7% to US$3.39 billion in 2022. Comparatively, its bottom line is forecast to decline from adjusted earnings of US$14.5 per share in 2021 to a loss of US$11.68 per share in 2022.
Coinbase announced its second-quarter (Q2) earnings last month and reported revenue of US$803 million, down 61% year over year. Its net losses swung to US$1.1 billion compared to a profit of US$1.6 billion in the year-ago period.
The total assets on Coinbase also fell to 9.9% in Q2 from 11.2% in Q1, indicating the company is losing market share to peers such as Binance and FTX. Comparatively, Coinbase managed to improve its market share from 4.5% in 2018 to 11.5% in 2021.
It’s imperative for brokerage and exchanges such as Coinbase to at least maintain the assets on their platform, as it may lead to revenue-generation opportunities over time. In Q2, around 82% of Coinbase revenue was derived via transaction fees. But the company is now looking to diversify its revenue base by expanding its suite of products and services.
It is focused on accelerating revenue from subscriptions and services, which include custodial fees and even blockchain rewards. In Q2, this segment increased sales by 44% year over year.
Coinbase continues to introduce new features that include Ethereum staking and an enhanced application for retail investors in addition to developer tools.
Coinbase recently disclosed that it is also expanding its cloud-based services. Over the years, cloud computing solutions have allowed enterprises to take advantage of hardware and software platforms without having to build their own infrastructure.
One of Coinbase’s cloud products is called Node, which is available for those operating in the Web3 space. In order to drive adoption of Coinbase cloud higher, Node is now available for free, with the option of upgrading to an enterprise account.
Subscription sales for Coinbase stood at US$21.8 million in Q2, accounting for 3% of total sales. But this number should continue to move higher in the upcoming months.
Coinbase is a high-risk, high-reward bet. If you are bullish on the future of cryptocurrencies, it makes sense to buy and hold COIN stock in your equity portfolio. Right now, Coinbase stock is also trading at a discount of 50%, given consensus price target estimates.
The post Is Coinbase Stock a Good Bet for Cryptocurrency Investors? appeared first on The Motley Fool Canada.
Want the mouth-watering gains cryptocurrencies can offer without all the risk? Then you’ll want to pay close attention.
Because our market-beating team is giving away 5 of our top stocks poised to potentially make a fortune from cryptocurrency, and you can get your copy of this premium research for FREE today.
Simply click the button below to get your hands on this new research immediately.
See the 5 Stocks
More reading
15 Top Stock Picks for 2022
14 Top TSX Stock Picks for January 2022
3 Canadian Stocks to Buy for Monthly Passive Income
TFSA Passive Income: How to Earn $346 Per Month Tax Free for Life
4 Cheap Canadian Stocks That You Can Buy Under $30
Two New Stock Picks Every Month!
Fool contributor Aditya Raghunath has positions in Bitcoin and Ethereum. The Motley Fool recommends Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool has a disclosure policy.
Cryptocurrency exchange Coinbase (COIN) has registered with the Dutch central bank, allowing it to offer crypto products to consumers and businesses in the Netherlands.
Today's Research Daily features new research reports on 16 major stocks, including BHP Group Limited (BHP), United Parcel Service, Inc. (UPS) and Adobe Inc. (ADBE).
The box office will have two buzzy films to showcase this weekend with Olivia Wilde's "Don't Worry Darling" and "Avatar's" re-release on tap to hit theaters on Friday.
During his testimony to Congress on Wednesday, JPMorgan CEO Jamie Dimon criticized cryptocurrencies like bitcoin, comparing them to Ponzi schemes.
Not all growth stocks are equally risky. There are many blue-chip growth stocks and industry leaders that you can add to your portfolio without raising their risk profile. The post Shift Gears and Accelerate Your Portfolio’s Growth With 3 Stocks appeared first on The Motley Fool Canada.
Shell's incoming Chief Executive Wael Sawan is set to accelerate the group's drive to build its renewable energy business, including through a possible "transformative" clean power acquisition, company and industry sources said. Sawan will from January take on a firm with a strong balance sheet after a surge in oil and gas prices, but whose renewables capacity has lagged peers like TotalEnergies and BP as green issues come increasingly into vogue. Shell aims to halve its greenhouse gas emissions by 2030 and to become a net-zero emitter by 2050, and is already moving to achieve that, shifting hundreds of experienced oil and gas staff into the business and hiring hundreds more this year.
LONDON (AP) — The Bank of England raised its key interest rate Thursday by another half-percentage point to the highest level in 14 years, but despite facing inflation that outpaces other major economies, it avoided more aggressive hikes made by the U.S. Federal Reserve and other central banks. It is the Bank of England’s seventh straight move to increase borrowing costs as rising food and energy prices fuel a cost-of-living crisis that is considered the worst in a generation. Despite facing a s
Newtopia Inc. ("Newtopia" or the "Company") (TSXV: NEWU) (OTCQB: NEWUF), a tech-enabled whole health platform creating sustainable habits that prevent, slow, and reverse chronic disease, today announced that on September 14, 2022, at the Company's annual and special meeting of shareholders (the "Meeting"), that its shareholders voted in favour of all matters put to shareholders.
LINE FRIENDS – one of the world's fastest-growing character brands – is bringing extra joy and cuteness this fall with a new pop-up store in Montréal.
BEIRUT (AP) — Lebanon's banks will remain closed indefinitely after rejecting a proposed government security plan, a senior official with the country's commercial banks association said on Thursday, amid a wave of protests and heists targeting its failing financial system. The Association of Banks in Lebanon initially announced a three-day strike, after at least seven bank branches were stormed last week, where assailants demanded they withdraw their trapped savings. Among them is Sali Hafez, wh
(Reuters) -Ancora Holdings, one of the hedge funds that spearheaded a board shake-up last year at Kohl's Corp, is now pushing for the removal of the U.S. retailer's chief executive and board chairman, according to a letter sent to the company on Thursday. The move marks the beginning of a new round of shareholder unrest for Kohl's after the company explored a sale and decided in July to remain independent, leading to a plunge in its shares and disappointing investors who had pushed for a deal. Ancora, which holds a 2.5% stake in Kohl's, asked for the replacement of CEO Michelle Gass and board chairman Peter Boneparth with business leaders who have operating expertise and experience in turning companies around.
U.S. passenger airline flight cancellations in July fell to 1.8% from 3.1% in June, although air travel service complaints rose 16.5%, the U.S. Transportation Department said on Thursday. The Transportation Department has been pressing airlines to improve service and boost staffing as summer travel woes snarled tens of thousands of flights. Airlines say Federal Aviation Administration (FAA) air traffic control staffing has been a significant factor in cancellations and delays.
WASHINGTON (Reuters) -U.S. theft claims were nearly twice as common for Hyundai Motor and Kia Corp vehicles compared with all other manufacturers among 2015 through 2019 model-year vehicles, a non-profit group said Thursday. The Insurance Institute for Highway Safety's (IIHS) Highway Loss Data Institute said many 2015-19 model year Hyundai and Kia vehicles do not have electronic immobilizers, which prevent people from breaking in and bypassing the ignition.
OTTAWA — Retail sales fell 2.5 per cent to $61.3 billion in July, the first drop in seven months as sales at gasoline stations and clothing and clothing accessories stores decreased, Statistics Canada said Friday. The drop was deeper than the 2.0 per cent drop that the agency had predicted in its early estimate for the month, however its initial estimate for August pointed to a gain of 0.4 per cent for the month. CIBC economist Karyne Charbonneau said retail sales had been more resilient than ex
Watson Goepel LLP ("Watson Goepel" or the "Firm"), is pleased to announce that the Hon. Richard B.T. Goepel, K.C. has joined the Firm as Senior Counsel effective September 7, 2022. Mr. Goepel returns to Watson Goepel following his retirement from the BC Court of Appeal. He brings a wealth of experience and knowledge to the Firm after serving on the bench for over 20 years.
"Threats that began with lawsuits have escalated to threats of physical violence and even death threats," the company said, adding it was working with law enforcement to investigate. Late last month, some Faraday Future employees wrote to the board and shareholders seeking the removal of executive chairperson Susan Swenson, suspecting she had organized attempts to "push the company into bankruptcy and restructuring". The Los Angeles, California-based company said a law firm hired to conduct a "thorough independent external investigation" found the "allegations" were without merit.
WASHINGTON (AP) — The number of Americans filing for jobless benefits rose slightly last week with the Federal Reserve pushing hard to cool the economy and tamp down inflation. Applications for unemployment benefits for the week ending Sept. 17 rose by 5,000 to 213,000, the Labor Department reported Thursday. Last week's number was revised down by 5,000 to 208,000, the lowest figure since May. First-time applications generally reflect layoffs. The four-week average for claims, which evens out so
The euro zone is facing an economic downturn but inflation is still far too high, so interest rates need to keep going up, European Central Bank board member Isabel Schnabel said. "A looming downturn would have a dampening effect on inflation," Schnabel told German news website t-online in an interview. "However, the starting point of interest rates is very low, so it is clear that we need to continue raising rates."
OTTAWA — Proposed new federal taxes on some financial institutions could generate $5.3 billion over the next five years, the parliamentary budget officer estimated in two new reports issued Thursday. The documents calculated the expected revenues from the Canada Recovery Dividend and a proposed permanent increase to corporate taxes on banks and life insurance groups. The PBO said the dividend — a one-time 15 per cent windfall tax on banks and life insurers profits made during the pandemic — will
Canadian mining firm Trevali will close its Perkoa zinc mine in Burkina Faso, a company official told Reuters on Friday, following a flood at the mine in April that killed eight workers. The mine, one of Trevali's three main operating assets, has been closed since. "The funds still available…are insufficient to complete the rehabilitation of the mine," said Ditil Moussa Palenfo, country director of Nantou Mining, the Trevali entity that owns Perkoa.


Post expires at 8:52pm on Thursday March 23rd, 2023

Leave a Reply

Next Post

What Is The Cryptocurrency Mining Hash Rate? - MacSources

Fri Sep 23 , 2022
Get the latest creative news from FooBar about art, design and business. By signing up, you agree to the our terms and our Privacy Policy agreement. IntroductionConsidering participating in mining equipment? In that case, it’s critical to comprehend what computational power is and precisely what it indicates. Additionally, what could impact your […]

You May Like

%d bloggers like this: