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Wednesday, August 10, 2022

Bitcoin Has Gone Beyond Owning COIN Stock

It has been understood that purchasing a Coinbase stock in order to gain indirect exposure to the market of Bitcoin has been quite a bad strategy. Notably, the Coinbase stock has also gone down by around 50% to almost $186. This could be measured further from the opening rate on its initial public offering on the 14th of April, 2021. In comparison to that, BTC went on to outperform the stock of Coinbase by managing to log fewer losses in around the same time frame- a little over 30% as it went down from $65,000 to $41,700. 

Coinbase Stock Can’t Face Up To Bitcoin

It has always been understood that Bitcoin and Coinbase share quite a positive correlation, which further suggests that most investors usually consider these as assets with similar value propositions. This is primarily due to the buzz around how the stock of Coinbase could turn into a simpler experience of onboarding for investors into the sector of crypto when compared to purchasing Ethereum, BTC, or other digital assets. 

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The stock of Coinbase has also been facing some major downside risks due to its depressive forecasts for FY22. Coinbase did state in its last report of earnings that the crypto volatility could turn the current year into an unprofitable year- thereby making direct exposure to Bitcoin a much more profitable venture. They also noted their adjusted EBITDA losses which would be coming through around $500 million if the users for its monthly transaction came at the fag end of the guidance range. 

For the uninitiated, Bitcoin is usually a completely different beast when it is compared to the shares of such companies as Coinbase. One of the concepts behind the increase in the price of BTC today has been the censorship-resilient decentralized ledger and the gold-like properties associated with the cryptocurrency.

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