Digital currencies have been the talk of the proverbial stock market streets as of late.The huge rise in institutional investment, support from high-profile entrepreneurs and celebrities, as well as the acceptance of cryptocurrencies like Bitcoin into mainstream payment methods has seen cryptos in the spotlight for the last year. The latest development in the crypto world is crypto marketplace Coinbase’s maverick move to enter the public trading arena. The company is the largest cryptocurrency platform in the US, and Coin base recently made headlines on April 14th with its first initial public offering valued at around $86 billion. The move is believed to be a huge step for cryptos and has already influenced the prices of Bitcoin and other prominent cryptos in the markets. But what is Coinbase, and why is this such an important development for digital currencies as a whole?
Coinbase leads the pack
Coinbase was founded in 2012 by former AirBnB engineer Brian Armstrong and Goldman Sachs trader Fred Ehrsam. The two formed Coinbase with the goal of making crypto transactions simpler and faster for people all over the globe.Since then, Coinbase has risen to the top and made its mark as the biggest cryptocurrency exchange in the US. Coinbase’s competitors include the likes of Binance, OKex and Huobi, which all have massive trading volumes. Since the beginning of 2021, Coinbase has sky-rocketed to a revenue increase of $1.8 billion, which is nine times higher than the company’s revenue for the entire year last year. In the first quarter of 2021, Coinbase gained 30% more users to total a whopping 56 million users. The company makes its money through fees and commissions that are charged to users every time they make a transaction, ie: buy or sell with crypto. These include a margin fee and a Coinbase fee,which varies according to location and amount. Coinbaseaims to provide a secure exchange to users for a variety of digital currencies, and with the added protection of insurance. The platform can be accessed from over 100 countries and features over $335 billion in trading volume every quarter.
This year, Coinbase’s IPO has been a highlight for cryptosas the first listed digital currency exchange in the US. Coinbase’s first print was set at $381, compared to the original forecast of $250. The company is trading as COIN on the Nasdaq and could very well be acatalyst for the greater global shift towards cryptocurrencies, potentially attracting even more online investment. Within the first day of trading, the popular crypto company’s value reached over $80 billion and the New York Times hailed the move as a “landmark moment” for the entire cryptocurrency industry. While the IPO has been already been monumental for the company, some experts think that Coinbase will continue to increase by as much as 50% by the end of the fiscal year.
When it comes to the impacts of Coinbase’s IPO on Bitcoin, the biggest crypto in the world,the effects were almost immediate as Bitcoin prices ramped up to record highs on the day the IPO was released. In fact, Bitcoin prices were sitting at $63,220, which was a 5% increase in one day, according to Coin Metrics. Ethereum prices also surged by 6.7% to hit a price of $2,280, which analysts put down to a huge increase in interest amongst online investment in cryptos as a whole. In short, the ripple-effect of the Coinbase IPO was resoundingly positive in the cryptocurrency market, with cryptos jumping upwards on the very first day. But what does this mean for the future of crypto in the long term? The future is looking bright, however, according to Santosh Rao, head of research at Manhattan Venture Partners, a merchant bank that was an early investor in Coinbase,the regulations surrounding cryptos will have a large part to play in the future, and so will the performance of Bitcoin as the world’s largest crypto. If nothing else, the Coinbase IPO has certainly put cryptos on the map and attracted some serious investor attention to this sector of the market. However, the continued forward momentum of COIN in the markets will depend on Coinbase continuing to retain its position at the top, as an affordable and secure way to make crypto transactions.
Crypto online investment as CFDs
With the rise in digital currencies, people are flocking to this sector of the marketand boosting its popularity. One thing that has put cryptos on the map before is its characteristic volatility, which may present both opportunities and risks for certain traders who partake in online investment as CFDs, or Contracts For Difference. CFDs allow you to take advantage of price changes in both directions—increases as well as decreases—of a wide variety of financial instruments, from shares in companies like Coinbase to cryptocurrencies like Bitcoin and Ethereum, without the need to purchase the underlying asset.
Essentially, you’re trading on volatility, so if you expected the price to go up, you’d open a ‘Buy’ deal or ‘Go long,’ whereas if you expected the price to go down, you’d open a ‘Sell’ deal or ‘Go short.’ No e-wallet required.
Getting started in the cryptocurrency market begins with finding the right broker for your unique trading needs. This means choosing a broker that you can rely on and which offers the features that you need for your trading journey.