Coinbase is the biggest and most popular crypto trading platform in the USA. The company has become the first crypto-based enterprise to get a green light from the Securities and Exchange Commission to become publically traded. There had been some speculations in the past that the listing might set off a volatile price trend in the crypto markets due to the increased pressure of buying. However, Coinbase’s decision to opt for direct trading has averted the crisis.
From Wednesday of the ongoing week, ticker COIN would become live at NASDAQ. A pre-market tokenized version of COIN is currently valued at $140 billion at FTX. The value is six times higher than NASDAQ and two times higher than its subsidiary, the New York Stock Exchange (NYSE). Matt Houga, CIO at Bitwise Management, told CNBC that there is going to be a gold rush for crypto equities as investors come to terms with the fact that digital assets are on the rise.
The COIN Stock said to be Overvalued by Financial Analysts
A close analysis of the PE ratio for the Coinbase stock indicates that the trade commodity could be overpriced for the market. There are big players in the industry that have been listed for a longer time, and the COIN PE ratio has managed to upstage them. The PE ratio is the measure of earnings per share in comparison to the number of times the market price is valued.
The NASDAQ itself has a PE ratio of 25-30, while a payment giant like PayPal scores 75. In comparison, the PE ratio for Coinbase as per Q1 analytics falls in the range of 90-120. While some analysts are worried that this number can prove to be a bubble, others are justifying this value based on the company’s high earnings.
The Top ETFs to Include Coinbase Stock
The profit margin for Coinbase is nearly four times higher than NASDAQ and many folds greater than PayPal. The age and market presence of these companies are infinite in comparison to Coinbase. There are also concerns about the dominating ratio of failure for tech startups. Jeff Dorman, CFA and CIO of Arca said that 38% of tech companies end up going bankrupt. The ratio of failure for tech companies is higher than last year.
However, the strong presence of Coinbase in the market might be able to keep it afloat for a longer duration. Meanwhile, prominent ETFs are making a beeline to get access to COIN as soon as possible. The Ark fintech Innovation ETF (ARKF), Transformational Data Sharing ETF by Amplify (BLOK), and Global X Fintech ETF (FINX) are the top of the list buyers who are eyeing the COIN ticker.