Crypto isn’t for everyone, but if you want to invest in it, this stock is a promising way to do so.
What should you do if you’re not well-versed in the various cryptocurrencies, such as Bitcoin, but you want to invest in crypto? Well, I’d suggest that you first read up on the topic, as it’s always extra risky to invest in things you don’t understand. You want to appreciate not only the opportunities, but also the potential pitfalls.
Once you’re ready, though, I’d suggest taking a look at Coinbase Global (COIN +3.65%). Why invest in Coinbase? Well, primarily because it helps you avoid risking your money in any single cryptocurrency — because it’s the leading cryptocurrency exchange platform. It’s where large numbers of people go to buy or sell cryptocurrency.
Image source: Getty Images.
Indeed, as of the end of September, it was boasting $295 in quarterly trading volume and an ecosystem of 245,000 partners in more than 100 countries — partners who “trust Coinbase to easily and securely invest, spend, save, earn, and use crypto.”
Its third quarter featured earnings that exceeded expectations and revenue of $1.9 billion, up 25% year over year. Management noted that “our platform now covers approximately 90% of total crypto asset market capitalization.” Coinbase is also diversifying its revenue streams through acquisitions, such as its purchase of Echo, which helps early-stage crypto ventures raise capital.
Today’s Change
(3.65%) $9.47
Current Price
$269.31
Key Data Points
Market Cap
$70B
Day’s Range
$264.70 – $272.52
52wk Range
$142.58 – $444.64
Volume
180K
Avg Vol
9.8M
Gross Margin
86.71%
Dividend Yield
N/A
Here are some reasons to think twice before investing in Coinbase stock:
- It appears a bit overvalued at recent levels, with both its price-to-sales ratio and its price-to-cash-flow ratio well above their five-year averages.
- Whenever cryptocurrencies cool off and/or retreat, there will likely be less trading volume, and therefore less income, for Coinbase.
- It’s not for you if you don’t do well with volatility.
- If you don’t really understand how cryptocurrencies work and you’re not confident that they will do well over time, this may not be the best investment for you.
Consider it carefully and decide whether Coinbase stock seems like a promising fit for your portfolio.
Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.