The Coinbase Recap
I enjoy watching the Coinbase stock (COIN) and everything that goes on around it. (I am not an investor in the stock) but I find it interesting to track and see how it compares to crypto.
Coinbase launched it's stock on April 14th 2021 which marked an important day in history for the combination of stock market and crypto. Like with any IPO there is often a hard sell off the first few days into the market and Coinbase was no exception. However it's also been facing some headwinds in terms of the crypto markets.
Coinbase is like a DeFi/PoS Platform
Since the launch of Coinbase the stock is down over $100 however it's seemed to find a decent base price even during the market volatility. That's mainly because Coinbase earn it's money from trading. The more trading taking place the more funds they get from fees. In reality it's just like DeFi but DeFi having much lower fees.
Most people still use Coinbase however as an easy way to get into crypto that has a very easy and fluid UI. Because of that it's also become a new hot bed for PoS and I'm curious how big of an impact it will have on both stock price and how much "holding" it will have when Ethereum goes to PoS. The generation of Fees from ProofOfStake could be massive for the company in Q4 2021 and Q1 2022 for Coinbase.
Understanding How Coinbase Makes Money
Coinbase makes money from fees however those fees of course pay higher when the markets are up as the value is higher. However the other factor is how many trades are taking place. Double the trades, double the fees thus the price could shrink in half and the company would still be making just as much as it was before.
We have see transaction on Coinbase increasing due to the fact of it piggybacking off of hype trends as of late such as Dogecoin and Shiba.
The question now will we see the value of Coinbase start to go up or will it start falling victim to the massive drop in crypto prices? Or will the same/ increased volume be enough to offset it and Coinbase could be on it's way up?
*This article is for entertainment purposes only and not investment advice.
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