Coinbase's stock price just skyrocketed. Is it time to buy?

In the recent past, you'd be hard pressed to find more than Coinbase (NASDAQ resonance code: COIN) Better performing stocks (modal particle intensifying preceding clause) The company's stock price has soared 6,26% since the start of 2023. Shares of the digital asset brokerage and exchange have soared 6,26% since the start of 2023, thanks to interest in the bitcoin (virtual currency) and the stock market Rekindled Interest The

Coinbase's momentum has continued into 2024, rising nearly 50% this year alone (as of April 8.) This top-tier Cryptocurrency Stocks It just blew up. Is it time to buy stocks?

Favorable trend

Coinbase's impressive stock price rally is undoubtedly being driven by some very favorable trends. Investors need to be aware of these trends.

The first microfactor has to be the rebound of the cryptocurrency market as a whole. in early 2023, the market capitalization of the industry hovered around $800 billion. As of this writing, the market capitalization has reached $2.7 trillion. After investors wiped out the industry in 2022, the situation has dramatically increased.

This year, I think Spot Bitcoin Exchange Traded Funds (ETFs)Approved It also boosted optimism in the cryptocurrency industry. It is also a vote of confidence for shareholders, as Coinbase is a trustee for many of these investments.

I think another positive trend on behalf of Coinbase is that the company's business has shifted to a more sustainable model. in 2021, when the cryptocurrency market last experienced a spike, the company generated 93% in net revenue from transaction fees on behalf of individuals and organizations trading on their carriers. in 2023, a very promising year for the market, 52% in sales were generated from transactions.

This change is attributed to the expansion of subscriptions and services. Management hopes this is just the beginning of a more predictable and stable business model.

One of the reasons to buy stocks

It's hard to overstate how amazing Coinbase's gains have been. But if you missed the surge, you better not be afraid to miss it (FOMO)Instead, think about what businesses and stocks will look like in three, five or even ten years. Instead, think about what the business and the stock will look like in three, five or even ten years. Having this long-term mindset is crucial when investing in stocks.

In summary, I think Coinbase is only suitable for those investors who are bullish on cryptocurrencies. This is because the business can be seen as a bet on the growth of an entire industry.

Coinbase is pushing for cryptocurrency regulators to come forward and talk to lawmakers about how to design appropriate rules. The company has made hundreds of millions of dollars in venture capital investments in private cryptocurrency-related businesses, directly contributing to their success. It is one of the largest and oldest brokers and exchanges in the world. It is attempting to usher in a new era for the industry, one that is focused on making cryptocurrencies more useful. So if the price of digital assets rises over time, it makes sense that Coinbase's finances and stock price would perform well.

Currently, Coinbase shares are down 28% from their all-time highs, so bullish investors have the opportunity to buy on a sharp decline. I personally don't buy the stock because I don't know what the crypto industry will be like in 10 years. There is too much uncertainty for me.

However, Coinbase could be a great buying opportunity right now for growth-minded investors who can afford to take on more risk in their portfolios and believe in the future of digital assets and blockchain technology. Just be sure to keep a very long-term mindset about how things will play out. Be prepared for the inevitable volatility along the way.

Should you invest $1000 in Coinbase Global now?

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Neil Patel and his clients do not own any of the stocks mentioned above. the Motley Fool holds recommendations for Bitcoin and Coinbase Global. the Motley Fool has a disclosure policy.

Coinbase's stock price just exploded. Is it time to buy?