The Future of $COIN: Analysis & Predictions
Over the last week, the price of Coinbase shares ($COIN) has dropped by almost 17%. And its shares, which are now trading at about $200, have fallen by almost half since hitting an all-time high of $420. The stock’s reprimand serves as a reminder of the high degree of volatility connected with cryptocurrencies.
When you consider that Coinbase priced its first public offering at $250 per share, generating a value of roughly $90 billion, the recent drop is even more striking. The current market capitalization is around $60 billion, and it is decreasing.
A Buying Opportunity Or A Possible Disaster?
Coinbase is a critical component of the cryptocurrency ecosystem, serving as a gauge for the increasing mainstream acceptance of Bitcoin and other cryptocurrencies.
However, with worldwide restrictions on the horizon, it is difficult to predict the future of cryptocurrency or how realistic the valuations may be in comparison to their current values in the short term.
Significant regulatory obstacles are being placed in the way of cryptocurrency, in particular, in large nations like China and India. Furthermore, considering that Bitcoin and Ethereum account for about 50% of their trading activity, this has put pressure on the $COIN stock.
Anticipating Coinbase’s Financial Future
While Coinbase has established itself at the forefront of the cryptocurrency industry, rising to become the largest cryptocurrency exchange in the United States, some have questioned whether the company is running a legitimate business, in part because of proposed regulations for Bitcoin and Ethereum. Meanwhile, the number of crypto-assets is anticipated to continue to increase at an exponential rate in the foreseeable future.
Some believe that the success of Bitcoin and Ethereum is a result of a speculative frenzy that will go away shortly. Despite the fact that the business made a profit in 2020, reporting profits of $1.65 per share on sales of more than $1 billion, the corporation continues to be plagued by anxiety.
Similarly noteworthy, in the most recent quarter, the trading volume on COIN’s platform increased from $350 billion to $450 billion, representing a $100 billion increase in total volume.
Revenue increased by $450 million in the second quarter, representing a quarter percent sequential increase, while profits increased more than 100 percent sequentially to $850 million.
Increasing Prospects For Long-Term Gain
The company’s verified users rose by more than 11 million from one quarter to the next, while monthly transaction users increased by more than 2.5 million from one quarter to the next.
As remarkable as these numbers are on their own, they are much more astounding when compared to the previous year, with revenue increasing by more than 1000 percent.
The company’s second-quarter earnings increased by more than $1.5 billion, a staggering spike of 5000 percent year on year.
After everything is said and done, although it is reasonable to be concerned about the stock’s value given the fact that it is strongly linked to the volatility of Bitcoin and other cryptocurrencies, Coinbase has created a business that is quickly expanding and financially profitable.
Furthermore, with the stock down 45 percent from its high, the risk-to-reward ratio is tilting in favour of the positive side of the equation. In any way, the Coinbase stock, at its present price, is still in a profitable position.