Coinbase IPO price predictions: forecasts for 2022 revealed

Coinbase IPO price predictions are in. Here’s the analysts' views for the next year

Now the hotly anticipated direct listing has been completed, Coinbase IPO (initial public offering) price predictions are in high demand. How is the exchange set to perform in the coming 12 months – and are there any potential pitfalls to investing in the stock?

The world’s second-largest crypto exchange certainly showed resilience on the day of the Coinbase IPO. A reference price of $250 per share had been set for the stock. When trading commenced on the Nasdaq, it surged to $381 – that’s a 52% improvement.

Coinbase IPO price estimates were difficult to make from there. As is often the case when companies go public, there was a lot of volatility, with shares trading in a rather substantial range as Wall Street traders attempted to find a fair valuation for the stock.

COIN ended up closing Wednesday’s session at $328.28. Although 31% higher than the Coinbase IPO reference price, it represented a 23.5% fall from the highs of $429.54 that had been seen earlier in the day. Thankfully, the bulls were out in force once again as Thursday’s trading commenced – and the stock saw some reassuring gains in pre-market trading.

It’s now time to move behind Coinbase’s IPO date and price, and examine the all-important dynamics that will help decide how much the company should be worth going forward. Although a $100bn valuation had been anticipated before COIN went public, some challenges remain.

Coinbase IPO price predictions: analysts start making forecasts

Before we knew for certain when Coinbase was going public, there had been a bit of unease about the multibillion-dollar price tag that was starting to be attached to the stock. One research firm, New Constructs, had said that a $100bn valuation was ridiculously high. Strategists argued that, although the exchange currently receives relatively high transaction fees, rival platforms may soon cut their own costs in a 'race to the bottom' that could affect profitability.

It’s been interesting to see Coinbase CEO Brian Armstrong address some of these concerns in a round of media interviews on the big day. He told CNBC that there has been little sign of transaction fee “compression” so far – and although the executive believes this is possible, he predicted that this is going to be a long-term problem rather than something Coinbase will have to deal with imminently. And, even if revenues from fees do start to erode, Armstrong stressed that the company has bold plans to secure up to 50% “or more” of turnover from a range of other revenue streams.

The Coinbase IPO is significant for a number of reasons. First, it could be argued that this gives retail investors and Wall Street institutions indirect exposure to the crypto markets – not least because COIN will likely rise and fall in conjunction with the value of bitcoin. Second, Coinbase is the first major exchange to go public, with the likes of Kraken among those set to follow suit (although Binance, the largest, appears to have no intentions of doing the same). Third, this flotation could help ensure that crypto businesses have legitimacy. It’s little wonder then that many analysts have been declaring it as a watershed moment.

Analyst coverage on this stock is relatively limited for now, but several Coinbase IPO price predictions have started to emerge. DA Davidson has a Buy rating on COIN and a whopping price target of $65. This was on the back of blockbuster Q1 earnings that suggested the exchange landed a net income of between $730m and $800m in just three months. If that forecast is realised, that would be up 99.7% on current levels. MoffettNathanson was also enthusiastic, setting a target of $600.

Trade Coinbase Global, Inc. Class A Common Stock – COIN shares price

Coinbase Global, Inc. Class A Common Stock
Daily change
Low: 258.9
High: 285.46

BTIG, which has a Coinbase IPO price prediction of $500, said:

“We believe COIN, the most popular consumer-facing cryptocurrency exchange in the US, is positioned to be a primary beneficiary of the increased adoption of Bitcoin and other digital assets as it continues to scale in the U.S. and internationally.”

Overall, three analysts rate the stock a Buy and one says it will outperform. No strategists currently suggest holding or selling the stock.

Coinbase FAQs

What is Coinbase?

Coinbase is a major cryptocurrency exchange that allows retail investors and institutions to buy digital assets including bitcoin and ether in a centralised way. It’s won plaudits because of how its interface offers a degree of familiarity for those used to platforms such as PayPal. The brand has also started to branch out in recent months, launching a debit card that allows people to top up their accounts with crypto and instantly convert it into fiat money at checkouts.

The company was founded in 2012 by Brian Armstrong, who used to serve as an engineer at AirBNB. At the time, executives were told that the concept for the business wouldn’t work. There have been controversies at Coinbase over the years but the brand appears to weather these storms well.

How do you invest in the Coinbase IPO?

Now that the direct listing has concluded (this is different from a traditional IPO because no new shares are created), the stock can be purchased through trading platforms – and offers COIN in the form of CFDs, which allow you to speculate on prices without owning the underlying asset. Binance is among the exchanges that also offer COIN in tokenised form.

It is worth noting that some trading platforms are not offering access to Coinbase stock because of how the company is linked to the world of cryptocurrencies.

Are IPOs good investments?

They can be, but IPOs can be risky. As we’ve seen with the Deliveroo IPO, there is every chance that prices can take a sharp tumble if they have been overvalued at an earlier stage. If you’re aiming to take a long-term view and believe in Coinbase’s business model, this could be a compelling investment to consider. That said, cryptocurrency purists would argue that it is much more effective to simply go long on Bitcoin instead.

As cryptocurrencies and blockchain continue to gain mainstream acceptance and a place in the public’s consciousness, Coinbase could have the potential to continue gaining market share as a destination for people who are snapping up digital assets for the first time.

FURTHER READING: Why did the Deliveroo IPO go so badly?

FURTHER READING: Despite $2.8bn fine, Alibaba stock forecast improves

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