Coinbase (COIN) stock has struggled to gain traction since its IPO in mid-April 2021, at the peak of the cryptocurrency market rally. The US-based cryptocurrency exchange’s price has fallen over 37% since its initial public offering (IPO). Although it briefly returned to IPO price during the crypto price surge last November.
Coinbase offers investors the opportunity to familiarize themselves with the development of the cryptocurrency market without having to choose individual coins. The share price has so far largely followed the direction of bitcoin, the largest cryptocurrency.
Is Coinbase worth investing in? Can the stock rebound to the IPO price level?
In this article, we take a look at the latest news and developments from the company, as well as some of the latest analyst predictions for Coinbase shares.
Coinbase stock embarks on a downtrend
The highly anticipated Coinbase IPO was launched on April 16 last year, driving up the prices of cryptocurrencies, including bitcoin. Investors took the listing as an indication of the growing adoption of mainstream crypto. But the sharp rises – which saw the price of bitcoin reach a new high of $64,863.10 on April 14 – prompted a “sell the news” response.
Coinbase closed at $342 on April 16. It then quickly lost value, falling to $224.35 on May 21.
The stock price tried to rebound during the cryptocurrency price increases in July and September, but failed to hold on to the gains. The stock soared to $342.98 on November 12, after bitcoin hit a new all-time high of $68,530.34 on November 9. But bitcoin’s price crashed again, hitting a low of $34,349.25 on January 22, and COIN stock price fell to $177.58 on January 28. COIN has since gained more than 20%, closing at $214.50 per share on February 9.
With cryptocurrency prices showing signs of bottoming, trading activity on the Coinbase platform may resume. Coinbase had 73 million verified users and 7.4 million retail monthly transaction users (MTUs) in Q3 2021. Retail MTUs were down 1.4 million, or 16%, from Q2 , when cryptocurrency prices peaked and then crashed.
Institutional investor interest in cryptocurrency grew in 2021. Coinbase launched its Coinbase Prime offering for institutional users in the middle of the third quarter. Advanced trading, analytics, custody, and funding features have given institutions tools and services to gain exposure to cryptocurrency markets.
In October, Coinbase announced plans to launch a non-fungible token (NFT) marketplace, which took off in 2021 and is expected to continue growing with adoption in the gaming, art, and craft industries. sports collection. The marketplace will initially support Ethereum-based ERC-721 and ERC-1155 NFT standards and will add support for other blockchains in the future.
On January 18, Coinbase announced that it would be partnering with Mastercard to enable market users to pay for NFTs with their Mastercard debit or credit cards and “find ways to bring this opportunity to the broader ecosystem. broad thanks to Mastercard’s scale and global network”.
Coinbase’s daily trading volumes in the fourth quarter, on average, topped the third quarter, according to analysis by investment bank Goldman Sachs (GS). Quarterly Coinbase app downloads suggest the company saw strong account growth in the fourth quarter. Coinbase accounts for around 7% of spot cryptocurrency trading volumes, behind Binance at 47% and OKEx and Huobi Global at 10% each.
The company is expected to announce its fourth quarter and full year 2021 results on February 24.
So, are Coinbase shares a buy, hold, or sell for investors ahead of the earnings report?
Coinbase Share Price Prediction: Can the Share Price Recover in the Future?
At the time of writing (February 10), the 12-month average price target of 20 analysts who published the COIN stock price target is $373.72, ranging from a low of $220 to a maximum of $600, according to data from MarketBeat. The consensus rating on the stock is “buy”, with 15 “buy” recommendations, four “hold” and one “sell”.
On Jan. 25, Mizuho Financial Group cut its Coinbase stock projection from $300 to the lowest estimate of $220, slightly above the current level. On Jan. 26, Goldman Sachs reiterated its buy rating but cut its COIN stock forecast from $352 to $288.
“We are seeing a beat on the back of strong 4Q21 trading volumes. Several times during the quarter, we have seen significant volumes on the COIN platform at Shiba Inu, which we believe indicates strong volumes of retail transactions (given that institutions tend to store more established coins such as BTC and ETH) and therefore we believe the company’s forecasts at earnings time for higher take rates through trading activity retail sales should continue,” Goldman Sachs analysts wrote in an analysis of Coinbase shares on January 11. They expect the company to report a 62% increase in total crypto trading revenue. currencies compared to the third quarter.
“While stocks have stalled following the recent decline in crypto prices, activity levels remain elevated and we view the company’s strong profitability/cash flow as a differentiator in fintech given the recent sale of unprofitable technologies which should enable the company to outperform peers in the current market environment.
“Given the strong momentum in retail activity levels, the continued adoption of new products such as staking, and the potential for emerging revenue streams (derivatives, NFTs) in the coming year , we remain constructive on the story and continue to view COIN as the blue chip way to gain exposure to the crypto ecosystem.
Technical analysis from algorithm-based forecasting site Wallet Investor showed that with a pivot point of $213.273, there was technical support at $211.657 down to $207.197, with resistance at $216.117-$220.577 . Wallet Investor is bearish in its long-term forecast for Coinbase stock price, expecting the stock to drop to $172.152 by the end of 2022 and to $157.07 by the end of 2022. 2023, falling to $132.344 by the end of 2025 and $112.067 by January 2027. This indicates the stock could continue falling towards the $100 level by 2030.
It is important to keep in mind that cryptocurrency markets remain extremely volatile, which impacts Coinbase’s share price. As a result, algorithm-based analysts and forecasters can and do err in their predictions of COIN stock price.
We recommend that you always do your own research and consider the latest market trends, news, technical and fundamental analysis and expert opinion before making any investment decisions. Keep in mind that past performance does not guarantee future returns. And never invest more than you can afford to lose.
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