If you want exposure to the crypto market without directly investing in cryptocurrency, you should consider investing in Coinbase. This guide will analyze the most important facts about the crypto trading platform, as well as explain how to buy Coinbase stock. In addition, we will go through the risks involved and provide you with an overview of the best brokers to use.
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What is Coinbase?
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Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam as a place to conveniently and securely send and receive Bitcoin. Today, the company has grown to support dozens of unique cryptocurrencies. The firm operates as a distributed company (employees engage via remote work) with no physical corporate headquarters.
Coinbase IPO: when did the company go public?
Coinbase went public in April 2021 at the height of a crypto market bull run. The company eschewed the traditional IPO process, listing its stock directly by allowing employees and existing shareholders to sell shares directly to the open market. In pursuing a direct listing, Coinbase IPO followed tech giants such as Spotify (NYSE: SPOT) and Slack, which helped standardize the process.
Coinbase was the first noteworthy crypto business to go public in the U.S., opening at $381 on the NASDAQ exchange, giving the cryptocurrency exchange an initial market cap of over $100 billion. However, since then (as of January 2024), the COIN share price has declined almost 50% as crypto markets have turned overwhelmingly bearish.
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Step-by-step process on how to buy Coinbase stock
Coinbase is a publicly traded company, meaning you can buy Coinbase stock through a broker. The steps involved in purchasing COIN shares are outlined in the following section in detail.
Step 1: Choose a broker
Firstly, to buy Coinbase stock online, you’ll need a brokerage account. Several platforms are available, but the right one will depend on your investment style (long-term buy-and-hold strategy or active day trading) and needs (e.g., whether you want to trade more advanced financial products such as options). When evaluating brokers, consider the following features:
- Fees: Brokerage fees is a type of fee collected by brokers to execute your transactions or provide specialized services. However, today, the vast majority of online brokers offer commission-free stock and exchange-traded funds (ETF) trading;
- Security: Pick a reliable broker by ensuring it is fully licensed by state regulatory authorities as well as FINRA and registered with the Securities and Exchange Commission (SEC);
- Trading tools: Active traders may want more out of their brokerage accounts. Some brokers offer fully customizable platforms with comprehensive analysis tools or access to additional data for an extra cost. If such additions are unnecessary for your purposes, avoid paying extra for them. It’s usually a good idea to look for an easy-to-use platform with a competitive fee structure if you are new to stock trading. A dedicated section with investing tips and tricks is a bonus;
- Access to market data: You should search for a platform that gives you access to solid market research and reporting tools to help you trade confidently with updated data;
- Fractional stock trading: Fractional shares allow investors to buy stock or ETFs by the dollar amount instead of the number of shares; particularly helpful for investors who don’t have limited capital but want to build a diversified portfolio or are looking to set up a dollar-cost averaging strategy.
Also, traders can opt for online, full-service brokers or discount brokers, as well as robo-advisors.
Where can I buy Coinbase stock (COIN)?
Access to the financial markets is easy and inexpensive, thanks to various online brokers. However, choosing the right broker optimized for your needs (investing goals, educational tools, trading style) is paramount for a successful trading experience.
To securely invest in Coinbase and buy COIN stock, consider these brokers:
1. eToro
- Commission-free stock trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
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- Commission-free stock trading;
- Global stock-trading on 90+ market centers;
- Fractional shares available;
- Extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimum.
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IBKR pays up to 4.58% interest on cash balances of $10k or more
Step 2: Fund your account
Once you have selected a broker, the next step is funding your trading account. Remember, it can sometimes take up to three days for the funds to be deposited.
Step 3: Research the company
When investing your money in the market, doing your research is crucial. If you want to buy COIN stock, keep an eye out for the current Coinbase stock price, as well as past price data, overall valuation, and company announcements regarding new launches or relevant news stories.
The best place to start your research on a stock is to go through its public filings with the SEC. Conveniently, Coinbase’s quarterly earning reports (form 10-Q), SEC filings, and letters to shareholders, as well as recent press releases, can be accessed directly from its investor relations section.
Suppose you’re relatively new to investing or have a low tolerance for risk. In that case, there may be better stock choices for your portfolio, particularly as Coinbase stock price is closely interconnected to cryptocurrency markets, which are high-risk volatile financial instruments.
Step 4: Decide how much you want to invest
After you’ve done your research and determined that Coinbase stock is the right choice for you, you’ll need to decide how much you want to invest.
The amount of money you invest ultimately depends on the price and number of shares you want to buy. If the share prices of stocks you’re interested in are financially out of reach, you can also explore fractional shares. Fractional shares allow you to purchase a portion of a stock instead of the full share.
Because investing can have unpredictable returns, it’s crucial only to invest what you can afford to lose and to be mindful of your risk appetite.
Step 5: Place your order and buy Coinbase stock
Once you decide on the number of shares or the dollar amount you’d like to purchase, you can place your order. If you’re working with an advisor, tell them you’d like to buy Coinbase stock and how much you can invest, and they’ll do it for you. Nevertheless, if you’re using a brokerage account, simply log in and enter the ticker symbol COIN in the search bar.
There are a few different execution options to choose from, including:
- Market order: A market order is an order to buy the stock at the current market price that is generally executed immediately (subject to availability);
- Limit order: A limit order is processed once the stock reaches your specified price. For example, imagine you want to buy Coinbase stock at $40 or lower. You would then set the limit price at $40, and the order will only execute when the stock reaches the set price or lower;
- Options contract: Options speculation allows for leveraged positions in a security at a fraction of the cost of the underlying asset. A call option allows the trader to profit if the price of the stock increases, and a put option enables them to profit if the stock price declines. Derivative products can only be traded on a margin account, which typically has higher minimum balance requirements than standard brokerage accounts.
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Step 6: Monitor your investment
Investors in COIN should expect price volatility, as Coinbase stock is heavily subject to news in the crypto-sphere as a crypto exchange. As a result, any change in crypto regulations or an industry-defining event like the collapse of FTX can cause the price to fluctuate enormously. In addition, moves in major cryptocurrencies like Bitcoin and Ethereum can also dictate the stock’s price action.
So, while “set it and forget it” is a solid strategy for a diversified portfolio of ETFs, for single stocks like Coinbase, investors should keep a close watch on press releases, company health indicators such as revenue and user growth, crypto industry performance as well as overall market conditions. Then, depending on your financial goals, use that knowledge to reassess whether it’s best to hold onto the stock or sell it.
Tip
You may also want to track the performance of similar stocks for comparisons, such as Riot Blockchain (NASDAQ: RIOT), NVIDIA (NVDA), and PayPal (NASDAQ: PYPL).
Coinbase stock price today
As a relatively new company, Coinbase’s stock price is subject to significant volatility and responsive to recent events, news, market conditions, etc. Coinbase stock has experienced a substantial price drop since going public, trading at almost half its IPO value as of January 2024.
Should I buy Coinbase stock?
Besides looking at Coinbase’s fundamentals, you can use technical analysis to evaluate the company and identify trading opportunities in price trends and patterns seen on charts.
This gauge displays a real-time technical analysis overview for your specified timeframe. It can be a valuable technical analysis tool for many traders by simplifying trading decisions by demonstrating the real-time recommendations of popular technical indicators such as moving averages and oscillators.
Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favorable buy/sell conditions if this is consistent with their strategy.
Common mistakes to avoid when investing in stocks
Mistakes are expected when investing in stocks but can be avoided if you recognize them. For an in-depth guide on investing mistakes, we have compiled a list of 17 common mistakes and tips for preventing them. But, for now, let’s list some of the most typical ones:
- Not performing your due diligence on the stock;
- Having unclear financial goals;
- Attempting to time the market;
- Failing to diversify;
- Letting your emotions rule the investment decision-making process.
How to sell Coinbase stock?
If Coinbase is performing differently than you’d expected or you’ve reached the financial goal you set when you first invested in the company, selling your shares is easy.
If you’re working with an advisor, they can create a sale order for you. However, if you have your own broker account, you can simply log on, navigate to the stock’s detail page, input the number of shares or dollar amount you want to offload, and tap sell.
Pros and cons of buying Coinbase stock
The crypto industry has enjoyed immense popularity over the past few years as everyone rushed to cash in on the boom. Like the investors who made early moves, Coinbase also benefitted tremendously from the bull run as masses of users poured in, and its revenue soared. Coinbase was in the right place at the right time and made the most of it.
However, much like Coinbase profited from the growth of crypto assets, it is likewise hindered by its downfall. So knowing how influenced COIN can be by the turbulence in crypto markets, it is worth examining both the pros and cons before investing.
Pros
- Market position: Coinbase is one of the leading and most recognizable platforms in the cryptocurrency space, offering a range of crypto-related services;
- Diversified exposure to cryptocurrency: If you believe in the value and growth of the crypto market, purchasing shares of COIN can present as a good way of investing in the sector without buying into various cryptocurrencies themselves;
- Stable user growth: Coinbase has demonstrated consistent user growth despite the chaos in crypto markets.
Cons
- Reliance on crypto markets: COIN stock price is heavily influenced by movements in the crypto-sphere;
- No dividends: Coinbase does not pay dividends to its stockholders;
- Regulatory risks: The cryptocurrency market faces uncertain regulatory environments across different countries, which could impact Coinbase’s operations.
Note
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Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
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0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
In conclusion
Coinbase allows investors to get exposure to the crypto market without directly investing in cryptocurrency. However, this also means your investment’s potential success is intimately in link with cryptocurrencies’ popularity and trading volume.
Ultimately, your decision hinges on faith in cryptocurrency’s future and backing a company integral to the crypto ecosystem.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about Coinbase
What is Coinbase?
Coinbase is a cryptocurrency trading platform where you can buy, sell and exchange popular coins.
How to buy Coinbase stock?
Coinbase became a publicly traded company in April 2021, and its stock is available on the NASDAQ exchange under COIN.
Is Coinbase a good stock to buy?
Investing in Coinbase diversifies into crypto, but its performance hinges on crypto market volatility. COIN’s suitability depends on individual factors and requires thorough research due to inherent risks. Historical performance doesn’t guarantee future results.
Where to buy Coinbase stock?
You can buy Coinbase stock at various online brokers such as Revolut, Interactive Brokers (IBKR), eToro, Degiro, and Robinhood.
Highly Rated Stock Trading & Investing Platform
-
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
