Cryptocurrency giant exchange Coinbase has recently announced its plans to go public through a direct listing process, which is expected to occur in late February or early March. Much like Spotify, Slack, and many other tech-related companies, Coinbase will not offer shares to the public via an Initial Public Offering (IPO) process. Instead, the largest cryptocurrency exchange in the US plans to sell its shares without the involvement of investment banks.
Nonetheless, Coinbase’s plan to go public is expected to be one of the most significant events in the market this year, particularly with the growing hype around bitcoin and the cryptocurrency market in general.
While the details of Coinbase’s IPO are not yet clear, we do know that the group has already submitted a draft registration statement with the Securities and Exchange Commission (SEC) in late December 2020.
So, in this guide, we’ll try the answer all the questions about Coinbase’s highly anticipated IPO. We’ll help you find a stock trading app that will offer you to buy Coinbase shares in the UK and analyze whether Coinbase is a good investment right now.
Step 1: Find the Best Stock App to Buy Coinbase Shares UK
Once Coinbase will become a public-listed company, you’ll be able to buy its shares on the US stock market like any other listed company. The US crypto exchange has chosen Nasdaq as the exchange for its direct listing instead of the New York Stock Exchange. This means that you’ll need to find a UK brokerage firm that gives you access to stocks on NASDAQ. Coinbase will be listed under the ticker symbol COINB.
Generally, many UK stock apps enable users to trade US shares. But you might want to consider a CFD platform that gives you margin (and short sell) trading due to the IPO price expectation of Coinbase. At the time of writing, Coinbase pre-IPO contracts are currently trading around $350 per share.
With that in mind, let’s take a closer look at two of the most popular stock apps in the UK to buy shares in Coinbase.
1. eToro – Zero Commission Share Trading and Investing
eToro is one the most used trading platforms in the UK and worldwide, offering more than 800 shares from the UK, US, and other stock exchange markets around the globe. As one of the leading trading apps in the markets, eToro offers its clients the popular stocks in the market like Tesla, Amazon, Facebook, Ford, and Google.
At eToro, you get to choose between buying shares via CFDs with no commission or buying shares directly on the exchange. When you trade CFDs, the broker offers you to leverage your position with up to 5:1. On top of that, there are no trading fees when you go in and out of a position. Instead, you pay the buy and sell spread of the tradable asset.
Best of all, eToro is widely known as a social trading platform where investors can connect with other users and even use tools that enable them to share their trading activity. As such, when you use the Copy Trade tool, you can copy trades of other investors or allowing other users to copy your trades and get rewarded for successful trading performance.
In terms of regulation and the security of funds, eToro is heavily regulated by several financial agencies that include the Financial Conduct Authority in the UK.
67% of retail investor accounts lose money when trading CFDs with this provider.
2. Libertex – Share Trading via MetaTrader4
Another reputable UK stock app hat offers share trading from US markets is Libretex, a Russia based brokerage firm that was founded in 1997. Unlike eToro, Libertex does not offer a large selection of shares from the UK, instead, it offers the most popular and highly traded stocks in the market like Tilray, Canopy, Baidu, Netflix, eBay, and many more.
Libertex offers its clients to trade on two trading platform – its own proprietary trading platforms that is available on any web browser and as a mobile application, or the most popular platform in the market, the MetaTrader4. The Libertex trading platform comes with helpful features like a market news feed and top rising and falling assets of the day.
In terms of pricing, Libertex is considered by many as a low-cost trading platform. This stock trading app takes another approach from other trading apps in the market. When you buy and sell stocks on this platform, Libertex allows you to trade with a zero spread and a fixed fee of only 0.15%. Lastly, Libertex is regulated by the Cyprus Securities and Exchange Commission (CySEC) under the Licence number 164/12.
Even though Coinbase shares are not yet listed on the US stock market, we can still evaluate the company’s performance and the price expectations of Coinbase’s share price at the time of IPO. In this section of our guide, we’ll cover crucial facts about Coinbase including an estimation of the company’s market cap, the forecast for Coinbase stock price at the time of IPO, and include the reasons why Coinbase might be a good investment.
Coinbase Share Price
Currently, there are a lot of speculations about the price of Coinbase stock when it goes public. Luckily, one of the crypto exchanges, FTX, has issued futures contracts of Coinbase stock ahead of its initial public offering (IPO). The pair symbol is CBSE/USD and it is trading at around $350 per share as of February 15. These contracts enable investors to speculate on Coinbase’s stock price at public opening.
Coinbase Stock Fundamentals
Being one of the largest cryptocurrency exchanges in the world and the largest cryptocurrency exchange in the US, Coinbase is currently valued at a market cap of around $63 billion. Overall, it has 43 million users in over 100 countries and $455 billion in total volume traded. On top of that, Coinbase claims to have a total amount of $90 billion worth of assets on its platform.
Coinbase has also raised over $500 million from leading hedge funds and VCs since its foundation in 2012. Unlike many other growth companies that go public with the goal to raise capital before becoming profitable, Coinbase is already a profitable company according to reports from 2018 and 2019. This essentially means that Coinbase is a relatively stable company and not a young startup.
Coinbase Dividend Information
As a new company in the market, Coinbase is not expected to pay dividends in the near future.
Should I Buy Coinbase Shares UK?
Shares in IPOs are quite often primarily allocated to financial institutions and large hedge funds. In that matter, Coinbase IPO is another step for the broad acceptance of cryptocurrencies and will enable more traditional investors to gain exposure to digital assets without investing in volatile crypto coins like Bitcoin, Ethereum, and IOTA.
Of course, there is always a risk to invest in a company that operates in an unregulated environment. However, buying Coinbase shares is not buying bitcoin or any other digital asset in the market. Technically, Coinbase is a cryptocurrency exchange and as such, the main question here is whether Coinbase is a good company and still has further growth potential.
Below, we have outlined some of the main reasons why buying Coinbase shares might be a good long term investment.
The Crypto Market is Gaining Momentum
Since the incredible run of bitcoin and other cryptocurrencies has started, no one can no longer ignore the positive momentum of this phenomenon. At the time of writing, the cryptocurrency market has a total market value of around $1.4 trillion, with bitcoin’s market capitalization is nearly $900 billion. If Bitcoin becomes a globally accepted store of value and cryptocurrency exchange will be recognized by more investors and companies, then Coinbase’s revenues will continue to grow over the next years.
Coinbase is a Profitable and Stable Company
In 2018, Coinbase reported $520 million in total revenue, and in 2019, it has reported a net profit of $163 million on the $543 million in total revenue. As for last year, although Coinbase has not yet submitted the report for 2020, there are rumors that Coinbase’s annualized revenue reached $2.3 billion and net profit grew by 20%.
Generally, the numbers are not surprising given the fact that the total crypto trading volume on the Coinbase exchange is about $455 billion with more than 43 million users on its platform. Additionally, Coinbase makes money from its crypto wallet and its crypto card services that work similarly to bank services – it charges a fee for every fund transfer or transaction made by the user.
Coinbase’s IPO Could Enable Traditional Investors to Gain Exposure to the Crypto Market
Another key reason to buy Coinbase shares is simply the fact that it will enable more traditional investors to invest in crypto-related operations without having to buy volatile assets like Bitcoin, Etehereum, Litecoin, and any other altcoin out there. This could be a great way for large institutions and financial banks to offer Coinbase shares to individual investors, so they could participate indirectly in the crypto crazy.
Step 3: Open a Stock Trading App Account
In order to buy shares in Coinbase, the first thing you need to do is to open an online trading account with a UK regulated brokerage firm. To help you get started, we are now going to show you the account creation process with eToro.
At first, visit eToro’s website and register for an online account. You will be asked to provide your full name, email address and create a password.
Then, eToro requires you to verify your identity by uploading both a proof of identity (POI) and proof of address (POA). Once your account has been verified by eToro’s team, you can then fund your account with the minimum requirement of $250 (around £180). eToro supports the following payment methods – debit or credit card, UK bank transfer, PayPal, Neteller, or Skrill.
Step 4: How to Buy Coinbase Shares UK: Tutorial
Technically, the process of buying Coinbase shares on eToro’s platform will be similar to any other asset that is currently offered by the broker. To buy Coinbase shares in the UK with eToro, simply follow these four steps below.
Log in to eToro’s trading dashboard.
Search for Coinbase at the search bar at the top of the screen.
Set the amount you wish to invest in Coinbase. Bear in mind that the stock app provides leverage of 5:1 for US shares.
Click on the Open Trade button.
Coinbase Shares Buy or Sell?
Ultimately, the decision of whether you should buy or sell Coinbase shares depends on the IPO price. Following its IPO, Coinbase could be very similar to Bitcoin and Tesla in the sense that it is a unique operation – the first ever cryptocurrency exchange to go public. As such, if you believe that bitcoin and the cryptocurrency market will continue to grow over the next years, then Coinbase is definitely a strong buy. On the other hand, if you think that Bitcoin and the crypto market is a bubble, you can short sell the Coinbase stock and make a profit if the Coinbase share price drops.
Nonetheless, Coinbae’s stock price is not following the rise of bitcoin or any other digital asset. It is a cryptocurrency exchange and operates similarly to major stock exchanges like the NYSE, NASDAQ, and LSE. Therefore, if the trading volume of cryptocurrencies keeps rising, then cryptocurrency exchanges like Binance, Huobi, and Coinbase will inevitably become profitable as more and more investors use these platforms to transfer and store funds.
Buy Coinbase Shares UK – the Verdirect
If everything goes as expected for Coinbase, it will be the first-ever cryptocurrency exchange to go public and trade in the share market. With a market cap of around $63 billion and more than 43 million users on its platform, Coinbase is not a small company that needs new capital to survive. Evidently, Coinbase issues shares to the public via a direct listing, which is a way for companies to help their employees and early investors to sell their stocks to the public.
With the success of bitcoin and cryptocurrencies in the past year, Coinbase shares could be an ideal buy for traditional and individual investors that want to get exposure to crypto-assets without having to directly invest in volatile and unpredictable assets like Bitcoin and other altcoins.
So, if are ready to buy Coinbase shares in the UK, simply click the link below to get started with eToro today!
67% of retail investor accounts lose money when trading CFDs with this provider.
When Coinbase is going public?
At the time of writing, the exact date of Coinbase IPO is not clear, but the company is expected to offer shares to the public in Late February early March.
Can you buy Coinbase stock right now?
Coinbase shares are not yet available to purchase on any exchange. However, when the company goes public you'll be able to purchase the stock like any other listed stock in the US markets. Meanwhile, you can track the Coinbase IPO stock price via the Coinbase futures on the FTX exchange.
How many users does Coinbase have?
According to Coinbase, it currently has more than 43 million active users on its exchange.
Is Coinbase profitable?
Because Coinbase is not yet a public listed company, it is not clear if it was a profitable company in recent years. Having said that, Coinbase's CEO Brian Armstrong has revealed that Coinbase was profitable between 2017-2019.
What's the easiest way to buy Coinbase shares?
Essentially, investors can buy shares in Coinbase when it goes public via the stock market or through a CFD brokerage firm. While there are pros and cons to each method, the easiest way to buy Coinbase shares when it goes public is via the CFD market.
Tom is an experienced financial analyst and a former grains derivatives day trader specializing in futures, commodities, forex, and cryptocurrency. He has over 10 years of experience in the Finance industry spanning across a day trader position at Futures First, and a web content editor and writer at FXEmpire.
Tom has has also written for The Motley Fool, FX Empire, Yahoo FinanceInsideBitcoins, and Learnbonds.