Coinbase or Bitcoin? Which Should You Own?
It is a question I have been mulling over ever since Coinbase (NASDAQ:COIN) went public in April of this year.
avatar
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.
2021-11-13 11:35

Why buy shares of Coinbase when I can just buy Bitcoin (BTC)? The two are inherently tied together, although Coinbase tends to follow the price of Bitcoin more than the price of Bitcoin follows Coinbase. To be honest, Coinbase has had a rollercoaster first few months as a publicly traded company. A lot of that is tied to the volatility in the crypto markets, so does that make Coinbase a good stock to invest in?

Coinbase or Bitcoin? Which Should You Own?

Shares of Coinbase have been on fire over the past month, which has coincided nicely with the recent crypto bull run. Bitcoin, Ethereum (ETH),even Shiba Inu (SHIB) have been hitting new all-time highs on a near-daily basis, and Coinbase has benefited from the rise in popularity. Coinbase stock is up nearly 40% over the past month, although it is still up only about 5% since the company listed on the NASDAQ exchange. Coincidentally, that was the date of Bitcoin’s previous all-time high date.

Coinbase disappointed on its recent earnings report, stating that a lull in the crypto markets during the third quarter led to a drop in revenues. The company missed Wall Street estimates on both the top and bottom lines, and net revenue decreased sequentially from quarter two by 41%. Perhaps most damning from the report was the fact that monthly active users also fell, by nearly one million users in the quarter which led to a near 30% decline in trading volume. It was not a good quarter, and Coinbase’s stock tumbled following the report.

But using that logic, the recent bull run in the crypto markets should help Coinbase have a stellar fourth quarter. The platform is about to launch its NFT Marketplace in the next couple of quarters, and Coinbase hopes to capitalize off the ongoing hysteria around the tokens. Coinbase will even be adding in social features like crypto portfolio touting, where users can brag about their crypto holdings and NFT collection.

Wall Street was unfazed by Coinbase’s earnings, and the stock received a generous price upgrade from an analyst from Piper Sandler. The investment firm raised the 12-month price target for Coinbase from $360 to an impressive $440 per share, which represents a near 20% upside from its current price. So why does it still seem easier to buy my favorite cryptos and call it a day?

Crypto investments have the potential for massive gains in a short period of time. Stocks are long-term compounders that will make gains over time. While Bitcoin and Ethereum may be past their parabolic growth stages, we have seen the stories of instant fortunes created by other cryptos like SHIB. Coinbase is an excellent company and should see strong growth from its stock moving forward. But it all depends on how you view the crypto market moving forward. Personal, I’m not against owning both shares of Coinbase and Bitcoin or Ethereum in a well diversified portfolio.


Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.

Rate this article

positive
negative
Published On
2021-11-13 11:35

avatar
About the Author
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.


buy-coffee
You've read 1 article in the last year
..thank you for supporting us and for visiting our site. Unlike many other sites, The Dog of Wall Street is available for everyone to read. Our focus is to provide great content for free. Do you like what we are doing? Buy us a cup coffee. It is the fuel that keeps us going..

Levi Strauss' Bold Gambit: Is the Denim Icon's DTC Shift Enough to Weather the Storm?
Levi Strauss & Co. boasts a strong quarter with direct-to-consumer growth and innovative fashion, but can it navigate the choppy waters of the retail market?
By Alfonso | 4 months ago

Amazon's Bold Counterattack: Introducing the China-Direct Discount Section
As competition heats up, Amazon unveils a daring new strategy to offer unbeatable prices and direct shipping from China.
By Alfonso | 4 months ago

Tesla's Legal Challenges: Facing the Music on Autopilot Misrepresentation
Court ruling intensifies scrutiny on Tesla's self-driving claims.
By Alfonso | 6 months ago

Netflix's Ad-Supported Triumph: A New Era in Streaming
Surpassing 40 million users, Netflix’s ad-supported plan redefines the streaming landscape.
By Alfonso | 6 months ago

Tesla Stock (TSLA): Look Who's Back!
I’m cautiously optimistic but I’m at the point where I need to see it to believe it.
By Mike Sakuraba | 6 months ago

2 Earnings To Pay Attention to Next Week
Since big tech is the theme, you probably know what I have my eyes on for next week.
By Mike Sakuraba | 6 months ago

2 Stocks to Watch Below $10
Here are two stocks that are currently less trading in the single digits that I believe have some relative upside from their current prices.
By Mike Sakuraba | 6 months ago

Looking Ahead to Tesla's Earnings: What Can We Expect?
Is there any stock that has been more talked about than Tesla (NASDAQ: TSLA) as of late? It’s a company that is always in the spotlight but the stock is under some heavy scrutiny this year and deservedly so.
By Mike Sakuraba | 7 months ago