The option of investing in bitcoin is much safer than being an owner of the stocks of Coinbase after its IPO. The choice of buying a stock of Coinbase (COIN) to have exposure indirectly into the market of bitcoin is a really bad idea. A better strategy is to hold the BTC directly.
Reasons Bitcoin Is Up By 20% As Compared To Coinbase
As compared to the initial rate that was shown on IPO on 14th April 2021, the price of COIN has decreased to approximately 50% which is nearly $186. In regard to this data, bitcoin has faced less loss and has outperformed the stocks of Coinbase which is observed by the data that its price dropped from $65,000 to $41,000.
The relationship between Bitcoin and Coinbase has always been positive, however, many investors look upon them as assets with the same proposition values. There was a buzz in the initial days that COIN would provide a simpler experience to investors as compared to ETH, Bitcoin, and other online assets in the crypto business.
The product of COIN is facing hard competition after the launch of firms that are enabled by crypto and have their names on indexes on Wall Street, ETFs which are crypto-based, and mining stocks. All these have enabled the investors to lose interest in COIN which is a go-to asset required for having exposures in crypto.
Moreover, the gloomy forecasts for the year 2022 make it riskier for COIN. As per reports, Coinbase is sure that volatility in crypto will result in huge losses in 2022 and guessing that the EBITDA will face a loss of approximately $500 million.
In the case of bitcoin, it is a pro when a comparison is drawn between other shares of a centralized company like Coinbase. The price of BTC is going up recently because of gold-like assets, BTC scarcity, and decentralized ledger which will be censorship-resilient.