There is no surprise I am a big fan of cryptocurrency. I look at Bitcoin as an excellent store of value and protection against the imminent rise in inflation. It’s a decentralized form of currency not controlled by anyone or any corporation. The government have no say in what the currency can and cannot do. That is the beauty of this market.
It is considered a risky investment, often too volatile for some taste, but I see it as a necessary purchase to make in everyone’s portfolio. We should have all strive to have some alternative investments in our portfolios, such as hard metals, real estate, artwork and yes, cryptocurrency.
Many professionals suggest allocating about 1% of your portfolio to crypto and I couldn’t agree more. In fact, it’s estimated that 11% of Americans own Bitcoin. This means there are about 30 million Americans in possession of some Bitcoin.
They made a wise decision in choosing to put their money in the future. It can often make you question your sanity, especially during times of corrections, like this past week, but overall it’s an investment you will be happy to choose.
The Rise In Popularity
Bitcoin and altcoins have become the face of recent news lately. Billionaires and large corporations have started to see the significance of crypto and the future value they can bring to the table. Just the other week, Elon Musk of Tesla announced they bought $1.5 Billion dollars worth of Bitcoin. Other companies have followed suit and have either purchased some coins or are opening their businesses to accept the growing currency. Uber and Tesla now accept payment by Bitcoin and Apple will be allowing the buying and selling of the coin.
It’s starting to become widely accepted as a form of currency. This means the questionable future Bitcoin held is no more. It’s here to stay and will only continue to become a source of interest for people.
And with the acceptance of Bitcoin, the exchanges are naturally profiting from the increase in exposure. This includes one of the largest, Coinbase.
Coinbase IPO Listing
It was announced Coinbase will be filling to go Public this year (2021). This is huge news, which only further proves that crypto is here to stay.
Since they are in the process of going public, Coinbase had to release their financials, which was eye opening to say the least. In just one year, since the recent boom of crypto, Coinbase had grown 5x. A majority of their revenue comes from the fees associated with purchasing coins. This means the more people buying crypto, the more money this company will be making.
There is no official date listed for going public, but we do know it will be soon. The company won’t be raising anymore capital and will instead go for a direct listing.
The Future of Coinbase
Coinbase going public will naturally open the doors for more exchanges to do the same. It will also give crypto more exposure to other investors, not yet willing to dip their feet into the crypto market. But will Coinbase be a good investment? It depends.
If you’re familiar with the crypto space, you’re no stranger to the ups and downs experienced on a daily basis. Just this month, Bitcoin fluctuated between its all-time high of $58k all the way down to $44k. It’s been extremely volatile times for crypto, but these periods of consolidation are normal for us. Just recently its correction ended and instantly scaled up to $60k.
Investors may not see it that way and could impact the upcoming stock performance. Another cause for concern is the company is solely reliant on the performance of crypto itself. Like many markets, crypto goes through bull and bear markets. What happens when it falls down into a bear market? Naturally it won’t be as popular, and the number of new investors will decrease. This would mean Coinbase revenue will drop, taking the stock price down with it.
There are a lot of factors to consider before throwing your money into the company. But if you believe in the future of crypto, and the success of this company, you can consider investing when their company goes public.
Final Thoughts
I am personally very excited about the Coinbase listing, but still deciding if I will invest in the stock itself. I think it’s a major step forward in the crypto space, but not sure if the stock will perform as well as I’d like.
Since the company is so reliant on such a volatile currency, I’m not positive I’d like to put my money into another risky investment. I am already heavy in crypto. This stock seems like a risk to me and I think I’ll be waiting to see how the public take to such a new listing, Also the valuation is so high, valued at $90 billion, which translates to about $350 per share. It’s a bit high for me.
Once they go public, I think I may put a minimal investment into the company but won’t put a full serious deposit until I can be certain of its future performance. Like I’ve said before, if I plan to keep a stock for more than 10 years, I’m not investing in it. I’m here for the long game and have no interest in these short-term investments.
As of this moment I am still leaning towards my current strategy of continuing to invest into Bitcoin and Ethereum, not the platform itself. I may as well keep my money in the coins instead of risking it on something else.
