Coinbase IPO — The Institutions Have Arrived
Cody Garrison | 4/14/2021
Coinbase, the US-based cryptocurrency exchange, debuted today on the NASDAQ under the ticker COIN. In a seminal moment for the cryptocurrency space, today’s direct listing marked the largest the industry has ever seen, and further provides institutional legitimacy and investment in the emerging cryptocurrency markets — one of the most bullish events for cryptoassets and blockchain technology in the last decade.
Having briefly captured a market capitalization of $105 billion, Coinbase notched itself as the world’s 15th largest bank, and the 8th largest in the United States. With refutable research shops like MoffetNathanson already putting a $600 price target on the stock, (currently trading at $360 at time of writing) there is no shortage of bulls on this stock.
However, with Bitcoin and Ether punching through to new all time highs on the hype leading up to the big day, Clearblock believes this event will serve as a short term peak for COIN and the broader cryptocurrency market. With anticipation building for months ahead of today’s NASDAQ listing, we believe a “buy the news”, “sell the event” phenomena will unfold. While we do agree MoffetNathanson will likely prove to be correct in the longer term growth potential of Coinbase, we have put a short term price target of $300 to be an accumulation point for this stock, valuing the company at a more reasonable $60 billion.
Following today’s IPO, we believe Bitcoin and the broader cyrptoasset market could see a ~20% correction following the historical stock listing, before confirming a new bottom and resuming its move up in the broader bull cycle.
Hopefully this color will help abate any FOMO you have seeing all the positive news in the market lately. Profiting off the cryptomarkets isn’t always as easy as it’s been the last couple months and for that reason, we see some near term choppiness on the horizon as a healthy indicator for the markets.
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The views above are opinions of the author and clearblock insights. They are not to be taken as investment advice.
