What Does the Coinbase IPO Mean For Traders and Investors?
This is a watershed moment for digital currency.
Coinbase went public last week, marking the debut of the first U.S.-listed digital currency exchange platform. Before its IPO, it was indicated at $380 and ultimately saw its first print at $381. Putting that into perspective, the original reference price for the cryptocurrency stock was $250.
Compared to when the Bitcoin pandemonium swept the market in 2018, things are much different right now. While digital currencies have been around for quite some time, Bitcoin has always been seen as the "underdog" and a form of payment only used by illicit "business" owners. But the original ethos of crypto is based on getting rid of the middleman and making payment transactions quicker, and in many cases, more transparent thanks to blockchain technology.
This year has certainly seen a lot of firsts other than the COIN IPO. Non-fungible tokens (NFTs) have also grown in popularity, leaving some investors scratching their heads. We're talking about original digital creations with current bids north of $1 million. But if you understand the digital ecosystem's premise, you'll start to understand what's driving love for digital art and trading cards.
Is it time to choose sides?
If you're new to the market, should you start choosing sides right now? In my opinion, the only side you should choose is the one that can make you the most money. In this light, diversification is important right now. What's more, having a proper understanding of how trading works and how to actually become diversified is paramount. You've got to be able to make money in multiple asset classes. Certain sectors will be hot and cold at different times, and being able to capitalize is the ultimate goal.
Staying diverse and sticking to a strategy is easier said than done, especially when there's so much hype surrounding both markets right now. Whether you're day trading stocks or looking to start investing in cryptocurrencies, staying diverse and developing a real strategy is more important than whatever the flavor of the day is in crypto or stocks.
What comes next after the Coinbase IPO?
When Coinbase went public, it didn't necessarily change the digital broker's status among crypto traders. Will it grow? Most likely, but what will become the next evolution, and how will Coinbase and others play a role?
We've seen a lot happen over the last four years, with the cryptocurrency industry going through plenty of volatile times. We've seen the crypto crash, dark web marketplaces getting shut down and plenty of scammy bitcoin mining companies closing up shop, leaving millions in lost funds in its wake. But now, the Coinbase IPO could mark a tipping point for cryptocurrency and bring that stamp of approval so many early investors have wanted.
The next wave for digital everything
Things like cryptocurrency penny stocks remain a hot topic among retail traders. If you look at some of the lesser-known names from last year, their share prices have skyrocketed. Companies like Marathon Patent Group and even Grayscale Bitcoin Trust traded around or below the $5 mark.
While there are still plenty of high-flying names that will surely come to light in the stock market, Coinbase has done something that not many other IPOs have done. It has bridged the gap between currency traders and traditional stock traders, and where there's money to be made, people will find a way to capitalize.
The beginning of the beginning
Now, the world of crypto is being put front and center, with some of the biggest money managers in the world watching. As they wait in the wings and monitor the first iteration of the "digitization coming of age," other early adopters are still expecting plenty more evolution ahead, thanks to this latest IPO.
This platform remains in its infancy as many new applications are being discovered, developed and implemented. The application in things like NFTs, for example, has become just one of these new ways a DeFi solution has been utilized.
Right now, the Coinbase IPO has shaken up both sides of this "coin," and it will surely be something to watch for as it relates to further disruption in the world of investing as time goes on.
Entrepreneur Leadership Network Contributor