Coinbase Global Inc. (NASDAQ: COIN) made its public debut at $381 a share on Wednesday, April 14. Now, investors want to know what's going to happen next. Here's our Coinbase stock price prediction, including whether the stock is a buy right now.
Before we get into our prediction for the stock, we want to set your expectations. This is going to be a very volatile stock, at least for the short term. There's not only a huge amount of interest in the company, but that interest is tethered to notoriously volatile cryptocurrency markets. Plus, Coinbase is going to be making some big changes that affect its revenue.
You can see that in how analysts have set their Coinbase price targets.
MoffettNathanson, a boutique equity research firm, gave Coinbase a "buy" rating including a price target of $600 a share, a 219% gain from today's price.
DA Davidson, an investment bank, gave it a $440 price target.
MarketWatch predicts Coinbase's valuation will plunge to a mere $19 billion. That's an 81% drop from the opening $100 billion valuation and would mean shares would trade for roughly $19.
With a range like that, investors better buckle up before buying.
Here's why...
Our Coinbase Stock Price Prediction
Predicting the price of Coinbase stock is going to be very difficult for a while.
As Money Morning's cryptocurrency expert Dave Zeiler puts it, "the company's fortunes will rise and fall with the crypto markets." We already know cryptocurrency prices fluctuate dramatically. Even worse, Dave predicts we could be in for a crypto bear market as early as next year. That will create some serious headwinds for Coinbase's share price, especially if enthusiastic buyers push prices higher in the short term.
It gets worse for Coinbase shareholders too.
Coinbase is going to have to slash its transaction fees to keep up with industry trends. As we've seen in equity markets, brokerage fees have been slashed to zero on simple stock trades. With more and more competitors to Coinbase cropping up, that trend will likely push cryptocurrency trading fees to zero as well.
That will eat into revenue and potential profits very quickly, and Wall Street won't like it.
But that doesn't mean this won't be a good stock to own.
"Coinbase Global will be a solid company." Dave tells us. "It has a powerful brand in a rapidly growing market. It's enjoying dramatic growth. It's making a profit."
And long-term, the cryptocurrency market will only get hotter. There just might be a cooling off period coming after Bitcoin's incredible 800% growth over the last year.
What we predict will happen is COIN stock will jump higher in the early days after the IPO. Then we expect a bearish period for the stock, either as competitors drive down Coinbase's revenue or cryptocurrency prices pull back.
Then Coinbase could be an excellent buying opportunity before the next major cryptocurrency rally, especially if management continues to make Coinbase the leading cryptocurrency exchange.
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