Coinbase Explained: An Introduction to COIN Stock Trading

Coinbase ranked second among the largest cryptocurrency exchanges in the world, with an average daily trading volume of $2.6B, trailing behind Binance (as of July 2024).

Given its significance, Coinbase may be a considerable option for traders and investors seeking opportunities within the cryptocurrency and fintech market.

This article provides insights into various aspects of Coinbase stocks, including how to trade its stock price.

Main Points:

• Coinbase Global, Inc. is the leading cryptocurrency exchange in the US, with over 100 million users in 100 countries.
• Coinbase was founded in 2012 and became a publicly traded company through a direct listing on the NASDAQ in 2021.
• Traders can speculate on Coinbase's stock price movements via contracts for differences (CFDs) or through alternatives like share dealing and index funds.
• The performance of Coinbase's stock is influenced by cryptocurrency market trends, competition, expansion efforts, regulatory compliance, and technological reliability.

What Is Coinbase?

Coinbase Global, Inc. is a publicly traded company and the leading cryptocurrency exchange in the United States by popularity and client base, using various financial services on its digital asset platform.

Coinbase's Bitcoin ecosystem encompasses over 9,000 financial institutions and 100 million users across 100 countries. As a decentralised organisation with a remote workforce, the company's mission is to create an inclusive financial system that provides individuals and businesses with access to financial services.

Products and Services of Coinbase

Coinbase provides a comprehensive suite of cryptocurrency products and services catering to retail and institutional investors.

Coinbase Retail Products

• Coinbase: A platform for buying, storing, and trading cryptocurrencies.
• Coinbase Wallet: A self-custody app enabling users to interact with decentralised applications (dApps) and manage their digital assets.

Coinbase Institutional Products

• Coinbase Prime: A trading platform tailored to institutional clients.
• Coinbase Custody: A storage system for safeguarding institutional digital assets.

Coinbase Additional Cryptocurrency Products

• USD Coin (USDC): A stablecoin pegged to the US dollar, offering a means to transfer value.
• Coinbase Card: A debit card that enables conversion and spending of crypto holdings.
• Coinbase Earn: An educational platform that rewards users with altcoins for completing interactive learning modules.
• Coinbase API: A developer interface for integrating cryptocurrency functionalities into applications to accept digital currency payments.

History and Key Development of Coinbase

Coinbase Founding and Early Years (2012-2013)

• In June 2012, former Airbnb (ABNB) employee Brian Armstrong founded Coinbase with Fred Ehrsam, an ex-employee of Goldman Sachs (GS).
• The company initiated bitcoin buying and selling services through bank transfers in October 2012.
• By May 2013, Coinbase had secured funding from venture capital firms, including Union Square Ventures and Ribbit Capital.

Coinbase Expansion and Growth (2014-2015)

• In January 2014, the management incorporated Coinbase Global, Inc. as the parent company for Coinbase and its other entities. During the same year, Coinbase achieved a user base of one million and established strategic collaborations with payment industry leaders like PayPal (PYPL) and Stripe.
• In January 2015, Coinbase introduced Coinbase Exchange, a US-based platform for cryptocurrency traders, and subsequently expanded its operations to Canada and Singapore.

Coinbase Growth and Developments (2020-2024)

• In May 2020, during the COVID-19 pandemic, Coinbase implemented a remote work policy and discontinued operations from a centralised headquarters.
• Coinbase made history on April 14, 2021. After completing a direct listing on the NASDAQ, it became the first pure-play cryptocurrency trading platform to be publicly traded on a U.S. exchange.
• The company's 60-second commercial during Super Bowl LVI drove 20 million hits to its landing page in one minute and catapulted its iOS app to the No. 2 spot in overall downloads.
• In 2024, Coinbase reportedly served as the custodian for 90% of the investment funds in the Bitcoin ETF market. The BTC ETF is worth $37 billion and ranks as the second largest commodity ETF market after Gold.

The Financial and Stock Performance of Coinbase Global Inc.

After briefly exploring Coinbase's evolution, it is also essential to have an overview of the company's finances and stock performance indicators.

Coinbase Stock Market Performance

• Coinbase (COIN) All-Time Low: COIN reached its all-time low of 33.00 USD on January 03, 2023.
• Coinbase (COIN) All-Time High: COIN reached its all-time high of 380.39 USD on November 09, 2021.
• Coinbase Long-Term Performance: In 2023, Coinbase's stock price rose 418% driven by a recovery in the crypto markets.

Coinbase Market Capitalisation and Outstanding Shares

• Market Capitalisation: In mid-2024, Coinbase had a market capitalisation of $59.6 billion.
• Outstanding Shares: The company holds 199.76 billion outstanding shares and a public float of $188.35 billion.

Coinbase Earnings Performance

• Earnings per Share (EPS): As of July 2024, Coinbase had a strong EPS of $5.01.
• Price-to-Earnings Ratio (P/E): Coinbase's P/E ratio as of July 2024 is $46.77, though this may change.

How to Trade Coinbase (COIN) Stock CFDs

'COIN' is the ticker symbol used to represent Coinbase Global Inc. on the NASDAQ stock exchange and online trading platforms such as Plus500.

Just like other popular shares and financial instruments, contracts for differences (CFDs) enable traders to speculate in the rising and falling prices of Coinbase (COIN) shares by entering into a contract with a broker to settle the cash difference from when the contract is opened to when it is closed. Hence, CFDs enable traders and investors to profit or lose from the price movements of Coinbase shares without owning the shares.

CFDs are also leveraged instruments, meaning they are typically traded on margin such that a trader can execute larger positions with relatively smaller capital.

Factors Affecting the Coinbase (COIN) Stock Performance

Several factors influence the performance of Coinbase (COIN) stock, including:

• Cryptocurrency Market Trends: The volatility of major cryptocurrencies like Bitcoin and Ethereum (ETH) can directly impact the trading volume on related exchanges and, subsequently, the profitability of these exchanges.
• Competition: Various fintech startups and traditional financial institutions recognise the potential of cryptocurrencies and are increasingly offering digital asset products and services. This massive entry into the crypto space creates competition for market share against leading crypto exchanges like Coinbase Global Inc.
• Expansion: Over the years, Coinbase has extended its products and services to other sectors and regions through diversification, acquisitions and partnerships with top tech companies like Apple (AAPL) and Alphabet (GOOG). Such positive developments can drive positive sentiment on the value of Coinbase stock.
• Regulatory Compliance: Crackdown, regulations concerns, lawsuits, or potential threats by the US Securities and Exchange Commission (SEC) or the Internal Revenue Service (IRS) on cryptocurrency companies, products, or services can influence investors' confidence in Coinbase business operations, thereby affecting its share price.
• Technological Concerns: Downtime or security breaches on the Coinbase network can drastically reduce the reliability of Coinbase products and services. This can potentially negatively impact the Coinbase share price due to the company's inability to handle such occurrences.

Trading Hours for Coinbase (COIN) Shares

Coinbase Global Inc. is publicly traded on the NASDAQ stock exchange. The standard trading hours* for Coinbase (COIN) shares on NASDAQ are from 9:30 AM to 4:00 PM Eastern Time (ET). However, they can also be traded electronically before and after the regular market hours during pre-market hours (4:00-9:30 a.m. ET) or after-hours sessions (4:00-8:00 p.m. ET).

On the Plus500 WebTrader platform, traders can monitor the real-time price movements of Coinbase (COIN) shares and trade them on weekdays from 13:30 PM UTC to 20:00 PM UTC.

*Please note that trading platform hours may vary depending on the individual operator.

Steps to Buy and Sell Coinbase Shares CFDs with Plus500

To trade Coinbase shares CFDs, follow these steps:

1. Open a real or demo trading account to get started.
2. Log in to the Plus500 app or WebTrader platform.
3. Find "Coinbase" from the instrument category section or use the search bar at the top left of the trading platform.
4. Conduct a thorough analysis of the Coinbase share price movement and determine whether to buy or sell.
5. Define and input your risk management parameters, including take profit or stop loss orders.
6. To finalise your trade, click the "Buy" or "Sell" button at the bottom of the order window.

Alternatives to Trading Coinbase Shares

There are alternatives to gain exposure to the Coinbase share price movement. This includes:

• Share Dealing: Share dealing involves buying and holding Coinbase stock for a long duration of time to benefit from its potential stock price appreciation, compounding effect and dividend payments.
• Indices: Indices are financial instruments that track the performance of a group of financial assets, including stocks, commodities, etc. Examples of indices that include Coinbase stock are the NASDAQ composite index (which comprises all Nasdaq-listed stocks) and the Russell 1000 Index (which comprises the largest 1,000 companies in the US stock market).

Conclusion

The role of Coinbase Global Inc. in facilitating digital asset trading and custody has positioned it as a potential focal point for traders and investors seeking exposure to the crypto market. Understanding the factors influencing Coinbase's stock valuation, including regulatory developments, cryptocurrency market trends, and the company's financial performance, is crucial for traders aiming to capitalise on its short-term price fluctuations or long-term growth potential.