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Coinbase Stock Soars: Is It the Right Time to Invest?

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Written by Timothy Sykes Reviewed by Jack Kellog Fact-checked by Ellis Hobb
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Coinbase Global Inc is experiencing a surge, as its stocks trade up by 4.61 percent on Friday, driven by the latest news highlighting enhanced regulatory clarity and growing institutional interest in the cryptocurrency sector.

Trump’s Return Influences Tech Stocks

  • As Trump steps back into the White House, expectations of new tariffs and policy shifts are creating a buzz in tech circles. Many speculate that top tech companies, including Coinbase, might reap benefits.

Candlestick Chart

Live Update at 11:37:26 EST: On Friday, November 15, 2024 Coinbase Global Inc stock [NASDAQ: COIN] is trending up by 4.61%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • There is a notable surge in cryptocurrency interest, as Bitcoin breaks records and dances near $90,000, pushing up stocks like Coinbase in a triumphant rally.

  • The monumental climb in Bitcoin prices has lifted related stocks, including COIN, suggesting strong market sentiment in the cryptocurrency domain.

  • With a robust gain of 16% in pre-bell trading, Coinbase Global has caught the investor’s eye, reflecting an intense wave of confidence in the stock’s potential.

  • CMB International has set a bullish tone with a fresh Buy rating on COIN, projecting its worth to reach $250, sparking investor curiosity and speculation.

Coinbase Financial Overview

Coinbase seems to be on a financial rollercoaster. Last quarter, they recorded a revenue of over $3.1B, turning heads, yet profitability metrics remain a mixed bag. The EBIT margin is struggling at -2.4%, but what’s grabbing attention is the promising pretax profit margin of nearly 9%. This margin hints at potential earnings before taxes, painting a brighter picture amid the storm.

The company’s price-to-earnings (P/E) ratio stands tall at nearly 47, indicating that investors expect substantial growth down the line. Yet, the financial strength remains a puzzle. The total debt-to-equity ratio is at a reasonable level of 0.48, but the leverage ratio appears daunting at 33.3. This high leverage suggests the company has a more considerable portion of its funding via debt, which could amplify gains or deepen losses.

Earnings from the recent quarter revealed many tales. Their net income wrapped up as an intriguing affair, standing at $75.5M, showing they’re making money but not at a blockbuster rate. Digging into cash flow, an interesting nugget reveals that Coinbase has poured heavy investments into their expanded operations. Yet, they’ve managed to increase their cash reserves by almost $300M, setting a strategic cushion for future ventures.

More Breaking News

Dive into their balance sheet, and the total assets are jaw-dropping at over $290B. However, the liabilities aren’t small fry either, balancing at around $282B. The equity drifts at approximately $8.7B, hinting at a fight to expand the gulf between assets and liabilities.

Cryptocurrency Surge Propels Market Dynamics

As Bitcoin continues its ascent, smashing past traditional resistance levels, Coinbase stands to bask in the spillover glory. The company’s platform avidly engages with the growing trading volumes sparked by Bitcoin’s monumental surge. Will its stock follow digital coins on this upward trajectory? History suggests where crypto goes, Coinbase often follows.

The recent uptick in trading volumes has given Coinbase not just a booster shot but a full adrenaline rush. Investors are rightly asking, “Will the momentum last?” Current trends point towards sustained interest. As the world speaks, or rather tweets, about Bitcoin’s sky-high performance, platforms like Coinbase can expect more curious hands reaching out to touch the digital magic.

A Closer Look at the Articles Behind the Surge

The Trump momentum isn’t just whispering; it’s creating waves. His administration’s potential policies could shine a beneficial spotlight on tech innovators, potentially pouring into their stock valuations. Still, regulations could turn steely, serving as a plot twist.

The execs at Coinbase actively engaging with the administration? That source of lobbying for softer regulations isn’t concocted. It’s a tactical play to shield the industry from harsh legislative winds, allowing businesses like Coinbase to thrive with fewer handcuffs.

Turning lens to Bitcoin’s breathtaking rally, the sentiments ripple across ecosystems. Traditional investors may waver, seeing volatile upheavals, while they could see a giant leap for the brave, betting boldly on COIN. Amidst all these, CMB International’s backing through its price targets stirs confidence cocktail, egging investors closer to pulling the buy trigger.

Drawing Parallels and Looking Forward

If market behavior teaches us anything, it’s that catalysts often spark chain reactions. Coinbase, perched snugly within this ecosystem, seems ready to ride the seismic crypto wave or withstand jolts depending on the broader market dance. As cryptos gleam, and policy seas remain uncharted, higher volatility could become the thrilling norm rather than the exception.

Yet, as market sages often remind us, one must balance optimism with caution. Anticipating Coinbase’s next chapter means weighing both potential upside and inherent risks. With cryptos racing and policy landscapes in flux, Coinbase is poised between opportunity and precaution—each a prominent part of its unfolding narrative.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”