The popularity of cryptocurrencies are on the rise, especially as Bitcoin and Ethereum begins to surge.
However, Coinbase Global (COIN) is at the forefront of the cryptocurrency industry. After the company’s hyped IPO, the question has become, is Coinbase stock a buy or sell in the current stock market rally?
Recently, at least one Wall Street analyst is less than optimistic about Coinbase’s long-term prospects. Raymond James gives Coinbase its first sell rating on Wall Street, citing competition concern. Coinbase may be one of the leading trading platforms in a new asset class, but it will face the same struggles as traditional brokerage firms, according to James.
Coinbase stock made an all-time time low of $208 per share today. The company’s stock is currently trading well below its IPO’s benchmark price of $250. Since April, the price has dropped by nearly 33%.
It’s reasonable for Coinbase’s stock price to track the ups and downs of crypto tokens. When investors are excited about cryptocurrencies, that leads to an increase in trading, which gives the company more revenue. If investors decide that the space no longer has any long-term promise, then Coinbase’s trading volumes would likely suffer, hurting its revenues.
In the short run, Coinbase has emerged as a premier provider of crypto brokerage services. Many institutional investors have joined the individual investors who gravitated to its platform, and the growing popularity of its Coinbase Pro offering could well help the company build even greater customer loyalty.
Coinbase’s gain came as prices for several major cryptocurrencies made solid advances. Most top tokens were up by anywhere from 5% to 13% on the day, even though many had fallen to their worst levels in months just recently.