Why is Coinbase (COIN) stock falling and going to recover in 2021?

Coinbase (COIN) went public via direct listing in April 2021 and climbed above the benchmark price on the day of listing. It then hit a high of $ 429.54, but then fell to an all-time low of $ 287.20 on April 22. The stock is now down almost 32% from its peak. Why is the stock of COIN decreasing and going to recover in 2021?

Coinbase is one of the leading cryptocurrency exchanges and has gained a lot from the growing adoption of digital currency. In 2020, its revenue grew 139% to $ 1.3 billion, and unlike many other recently listed companies, Coinbase is profitable: it posted a net profit of $ 322.3 million. ‘last year.

Is COIN a good long-term investment?

If you believe in the long-term potential of cryptocurrencies, crypto exchanges may seem like a good investment. Rosenblatt Securities, which recently posted a bullish rating on COIN stock with a “buy” rating and a price target of $ 450, pointed to the stock’s long-term potential.

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“We are optimistic about the long-term rise of COIN as it benefits from the increasing adoption and acceptance of cryptocurrency,” said analyst Sean Horgan. While Horgan has appeared cautious on the near-term outlook given fears of a crypto crash, he has a constructive view of the COIN stock for the long term.

“Net / net, we are buyers of COIN as a long-term category leader and pureplay cryptocurrency stock,” Horgan added. It also expects Coinbase to branch out into ancillary services to monetize its rapidly growing user base, which Square and PayPal have done wonderfully.

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Overall, Coinbase action looks like a good long-term investment based on the growing adoption of digital currencies. However, like cryptocurrencies, it would also be a high risk investment.

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