Why is Coinbase stock Plummeting? The 70% Correlation Between Coinbase And Crypto Based Assets
There are a few possible reasons for why the stock is Plummeting, and here’s my analysis to answer why is Coinbase stock plummeting?
1. The first reason could be because of the recent hack that took place on the Coinbase exchange. This could have made investors lose confidence in the company, causing the stock to drop.
2. Another reason could be because of the extremely volatile fluctuations that we have seen in the Crypto markets. This could have scared off some investors, causing them to sell their Coinbase stock.
3. It is also possible that the Plummeting is simply due to profit taking, as the stock has had a very strong run over the past few months. Some investors may have been looking to cash in on their gains, causing the stock to drop.
On a more fundamental however, I feel that since Coinbase stock is correlated around 70% with the volatility found in Bitcoin, that a lot of the correction with this stock could be due to just volatility in the Crypto Markets.
What Did Coinbase IPO At? A Valuation that Was Way Over It’s Price To Earnings Multiple
Coinbase IPO’d at $250 a share, and opened up trading at $381. It is now trading at nearly a third of what it’s initial IPO price was at, this kind of volatility is unprecedented, even for a Crypto stock.
What is Coinbase Stock Symbol?
The Coinbase stock symbol is “COIN”. I am likely going to be increasing my position in this security by a very small amount.
If you are looking to invest in Coinbase, I would recommend buying it at $250 or below. I believe that this is a strong long-term play with a lot of upside potential. With the stock currently trading at about $147, we are at a very good buying point, and I am likely going to jump on it soon in order to get some additional Crypto exposure in my portfolio.
What is the Market Cap of Coinbase Stock?
The current market cap for Coinbase is about $8.9 billion. This is with a Price to Earnings Multiple of somewhere between 10 and 11, meaning that the company could technically be very undervalued. If the Crypto markets increase by a factor of 7 or 8, expect Coinbase stock to shoot up as well as it is the primary exchange.
What is the Float of Coinbase Stock?
The float of Coinbase stock is about 55 million shares. On top of this, Coinbase has several hundred Billion dollars in Crypto Currency that they currently hold. Likewise, my estimation is that it could cost as much as $2,000,000,000.00 to consumers to offload all of that Crypto and convert it to Fiat. This could significantly add to Coinbase’s bottom line and I think it could help them to break even in a market crash or to have skyrocketing profits in a big Crypto uptick.
What Exchange does Coinbase Trade on?
Coinbase trades on the Nasdaq under the ticker “COIN”.
When did Coinbase Go Public?
Coinbase went public on April 14th, 2021.
How Many Employees Does Coinbase Have?
Coinbase has about 1,500 employees.
Final Thoughts On Why Is Coinbase Stock Plummeting? My 2 Cents
My 2 cents on why Coinbase stock is plummeting, or call it my 60 Satoshi’s on why the exchange is falling right now, is that the price is just so highly correlated to the price of Bitcoin, that with the near 33% to 40% plummet that we had in most Crypto Assets over the last 12 months, that the stock is just taking a beating as a result of it. I am going to put something like $1,000 into Coinbase between now and the end of the year in order to get some additional Crypto exposure, and I will likely do this in my Roth IRA account so I can minimize any cap gain expenses as a result of Bitcoin volatility, will report back with how this goes. Till next time, thanks for reading!
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