What’s Next for Coinbase (COIN) After a Blockbuster IPO
What’s Next for Coinbase (COIN) After a Blockbuster IPO Coinbase Homepage

Last trading week was marked by the blockbuster stock market debut made by the largest US cryptocurrency exchange Coinbase (COIN). After it received a $250 reference price on Tuesday, shares of Coinbase went live a day after to open more than 50% higher at $381.00.

Coinbase stock price then rallied further up to higher to print a record high at $429.54, before rotating sharply lower on profit-taking to close the first day over 31% higher compared to the reference price set by the Nasdaq stock exchange.

Coinbase stock has continued to attract massive attention from traders around the globe in days after the listing. Market analysts expect shares of the cryptocurrency exchange to continue attracting traders’ attention going forward and join a list of the best stocks to watch in April, including Pfizer (PFE), Moderna (MRNA), Cisco (CSCO), Target (TGT), and others.

Coinbase’s direct listing is likely to attract new users to crypto platforms, with startups and companies operating in this space coming up with different products to attract users. For instance, Mobie - a cashless, cardless, bankless, and zero-fee platform - provides its users with up to 6% in rewards when they spend at retailers.

"With people getting into crypto through coinbase they are going to need a real way to actually use their holdings in a way that gives them rewards and saves them money, that's where Mobie comes in,” Brandon Burgason, CEO of Mobie, a global mobile payments solution.

Industry experts also expect the Coinbase direct listing to pave the way to other regulated crypto companies to follow the suit and go public in the coming months and years. Emerging regulated cryptocurrency exchanges such as CoinZoom, a US exchange which is a registered MSB in all 50 states and territories, may feel better about the outlook of their industry following a successful debut from Coinbase.

Analysts weigh in

Industry experts and analysts are mostly saying that the Coinbase stock has massive potential going forward. Gil Luria, head of institutional research at D.A. Davidson, says COIN is a “great way to invest,” after hiking the price target to $650.00 per share.

"I expect that over time it's going to be one of the fastest-growing categories in technology," the analyst wrote in a note, before adding that Coinbase represents a really good way to gain crypto exposure through the capital markets.

"Retail investors that are looking at investing in Coinbase need to understand the layers and layers of risk to Coinbase's business," such as the high volatility of cryptocurrencies, the fact that Coinbase could sustain a cyber attack, as well as the rapidly-increasing competition.

However, he said that "the reason we recommend Coinbase is we believe that the reward is potentially so high that it justifies that level of risk." His $650.00 price target is certainly exciting as it indicates about a 98% price surge, compared to Coinbase’s $328 closing price on its public debut.

Still, Luria believes that the exchange’s valuation is guaranteed, considering that he is comparing Coinbase to other high-potential stocks rather than to other crypto exchanges.

What makes Coinbase an appealing investment choice is that it is "a diversified basket of crypto assets; it doesn't matter which crypto asset wins," Luria said. "What Coinbase does is it says, 'You don't have to figure it out,'” he added.

Institutional investors a key driver going forward

Crypto industry experts argue that the Coinbase direct listing marks an important milestone for the entire cryptocurrency ecosystem as well as benchmark for the rest of the cryptocurrency industry.

Antoni Trenchev, Managing partner at Nexo, believes that Coinbase’s direct listing is “for crypto what Google’s IPO was for the internet.”

“2021 is for our space the breakthrough year that 2004 was for Silicon Valley’s tech companies. Just over 15 years on, it’s hard to imagine life pre-Google,” Trenchev said.

Brokerage BTIG is also optimistic about Coinbase’s future gains, despite a rotation lower in the price action on the stock market debut.

BTIG has set a $500 share price target on Coinbase’s stock and said that the “gold standard among digital asset exchanges,” Coinbase, is expected to hit “sustained rapid growth” as adoption among institutional investors continues to increase and the industry’s ecosystem grows, according to BTIG’s analysts Mark Palmer and Andrew Harte.

Coinbase Global could benefit in several ways and establish an early advantage as an “on-ramp for mainstream crypto investors,” including diversifying its revenue stream and shift away from transaction fees, which gives rise to potential volatility.

Furthermore, analysts said Coinbase could leverage its strong platform for institutional investors, which they believe is a “key driver of growth going forward.”

Cathie Wood, the CEO and CIO of Ark Invest, bought a $246 million stake in Coinbase on its first day of trading.

Although Coinbase’s public debut on Wednesday may have disappointed a few who expected a stronger daily close, analysts are most bullish about the crypto exchange’s stock potential going forward.