It’s down to $253 as of recording.
Last week, Coinbase plunged to an all time low as many investors soured over the newly minted crypto platform. Coinbase is getting dangerously close to the $250 a share required for the stock to begin trading. Just to clarify, this is a reference point set by Nasdaq, not a direct indicator of the company’s potential market capitalization.
So, why the plunge? Several reasons: First, they don’t offer dogecoin, binance coins, and other speculative coins. With investors hellbent on pushing speculative coins into the stratosphere, they are putting their money where it is welcomed.
After an explosive debut, Coinbase has been on a downward trajectory. The company now has a total market capitalization of $48.7 billion. Roughly half of the $100 billion top it achieved last month.
Next – I’ve talked about this before and will say it again. Coinbase is too dependent on one source of income, trading. And worse, they are too dependent on a single crypto, Bitcoin.
Dependence on a single income is never healthy. A company has to be diversified.
Because when something goes wrong with that source of income, it takes the entire company with it.
You can take your cue from the likes of Apple, Google, and Facebook. Apple has diversified from computers to phones to streaming services. Google started as a search engine and is now in the streaming, cloud storage, phones, and internet service.
Even artists are diversifying.
JayZ is a rapper and producer but diversified into managing other artists, real estate, and a host of other businesses.
Others are coming out with their own fashion line, delving into movies, TV, and so on.
Third, there are expectations that other exchanges are coming on board.
Robinhood announced they are going public and I have no doubt Etoro is headed the same direction.
This is posting some real threats to Coinbase as investors look into the actual capacity, business model, and potential of crypto trading platforms.
Many investment experts always say that the secret to a successful investment is to go against the tide. When people are selling, buy. When people are buying, sell.
There is a huge possibility that Coinbase’s plunge is a signal for some to buy. We are not financial advisors but we know one thing
The biggest reason for you to invest in a company is faith in the company. If you believe that Coinbase is headed towards the right direction and that these issues are just hiccups, then invest.
But you need to do your due diligence. Look at what Coinbase is doing and determine whether or not they have what it takes to win over competition and all the hurdles they are experiencing.