Buying Coinbase shares will be investing in a digital currency broker where you can buy and trade Bitcoin and other cryptocurrencies. It differs from traditional cryptocurrency exchanges because it allows you to buy cryptocurrencies using fiat currencies.
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Coinbase is considered one of the largest cryptocurrency exchanges in the world. They have more than $ 20 billion in assets and more than $ 50 billion in cryptocurrencies have been traded using their platform since it was founded in San Francisco, California, in 2012.
As is usual in any investment model, before placing money in any asset, it is important to be clear about some issues such as:
- The amount of money to invest
- The type of investment you feel most comfortable with
- The tool on which to manage that investment
The first point, the amount of money to invest, should never exceed the amount of money that we can lose without affecting our economy.
During this guide we will review, along with the relevant information about Coinbase, the answer to the other two questions, focusing on CFDs as an investment tool and analyzing some of the best Stock Brokers as the instrument on which to trade.
Coinbase real-time quote
Here’s the minute-by-minute price for Coinbase (COIN), a Nasdaq-listed company:
How to buy Coinbase shares
On April 16, 2021, Coinbase shares will go public for the first time . If you are considering buying Coinbase shares, one of the first decisions you have to make is how you are going to invest in this asset.
Traditional investment mechanisms, such as the purchase of shares in cash, allow direct participation in the shareholding of the company, but they bring with them some disadvantages such as commissions, intermediaries, etc.
What solution? Invest with online brokers specialized in stocks such as eToro , through which you can buy the shares without fixed costs and without risks: the security standards are high and the trading platform is professional and safe.
If we want to become Coinbase shareholders, we must, therefore, open an account on eToro, select COIN and proceed with the purchase.
These traditional investment models are contrasted with other alternative formulas such as CFDs, an acronym for contracts for difference.
It is a derivative financial product that, instead of acquiring the share, speculates on its evolution in the market, being able, for example:
- Open a bullish CFD if you expect the asset to go up in value
- Open a bearish CFD if you expect the asset to decline in value
This provides a double direction that cannot be provided by direct investment with the purchase of cash shares or other investment tools such as funds.
Other important features of CFDs are:
- They have no commissions
- They can be operated in different periods (from a few seconds to a day, or medium and even long term)
- They allow diversification by investing in a large number of different assets
Where to buy Coinbase shares
To trade CFDs, it is necessary to choose the trading platforms. These are Internet brokers through which the investor can open and close their contracts for difference operations.
Keep in mind that the market has a large number of brokers on the Internet, but not all of them meet the necessary security and operational quality conditions.
To find the best brokers we must take into account some elements such as:
- It must be regulated and therefore comply with current legislation
- It must offer a comfortable, secure and affordable platform
- It will offer a good deposit policy, generally with low deposits to operate regardless of the user’s profile.
- It will provide different support tools to the trader, ranging from automated investment systems to information tools, demo accounts, etc.
Two platforms that meet all these requirements are eToro and Plus500
eToro is considered as one of the best trading platforms on the market. It is a broker with a long history and highly recognized that has millions of users globally.
The platform is regulated, therefore, it is a safe and reliable environment that complies with current regulations, for greater investor safety.
Some of the relevant features of this broker are:
- Apply very low spreads compared to the market average
- Have a large number of assets to invest
- Offer your own automated investment system (Copy Trading)
- Be able to start trading with a low deposit (200 euros)
The investment formula chosen by this platform is its own web environment. It is a very comfortable web environment, easy to access and simple, capable of satisfying both an experienced investor and a novice investor.
Copy Trading is a system really appreciated by users. Allows you to invest in automatic mode. The model is based on copying and automating the investments of professional traders. This makes it easy to have professional strategies without spending the time to develop them or without acquiring the knowledge to do it. Everything in automatic mode.
The platform offers a free demo account without limitation of functionalities to discover how to trade, learn, improve and test before investing with real money.
LiquidityX is considered another of the best Trading platforms on the market. It stands out, as we will see, for being one of the platforms with the highest volume of tradable assets in CFDs.
From a security point of view, it is a regulated broker that complies with regulations and, therefore, offers a safe and reliable environment for the investor.
This broker provided the particularity of allowing to operate from its own web platform, very comfortable and affordable, to a tool like Metatrader 4, one of the favorite tools of veteran investors to operate thanks to its flexibility and adaptability.
Among the relevant characteristics of this platform we highlight:
- The great variety of assets on which to invest, being probably one of the platforms with the largest volume of them
- A large number of information tools that make it easy to understand the evolution of assets
- An affordable deposit policy for any investor profile
As befits a good trading platform, this broker offers a free demo account that makes it easy to test all the platform’s functions and operate with virtual money.
Coinbase history and general facts
Coinbase was founded in July 2011 by former Airbnb engineer Brian Armstrong and was first funded by Y Combinator. In 2012, co-founder Fred Ehrsam, a former Goldman Sachs trader, joined the company, after which Coinbase launched services to buy, sell and store bitcoins.
Another $ 500 million in investments were contributed by a group of investors led by the Andreessen Horowitz fund. Chris Dixon, a partner in the fund and part-time member of Coinbase’s board of directors, notes: “[Coinbase’s technology] is like Google making Gmail for Bitcoin. This is exactly how they describe it.
Coinbase’s latest round was estimated at $ 8.1 billion. Ersam, 31, left the startup, but remains its main shareholder, also investing in companies that build payment systems for corporations on the basis of cryptocurrencies and blockchain.
Coinbase has become something of a crypto-asset creator for investors, as assets listed on its exchange have seen significant appreciation.
This development is largely the result of the evolution of crypto assets as an investment vehicle. Coinbase’s excellence in security, compliance, and ease of use has helped increase the number of users. When Coinbase gives its ‘seal of approval’ to a given exchange, millions of users can trade it, often driving prices up.
Coinbase business model
More advanced traders (including small institutional players such as crypto hedge funds and family offices) buy and sell crypto assets on GDAX and determine the average market price. Coinbase (the broker) then allows retail investors to buy and sell crypto assets at these average market prices, and charges a commission on top.
In practice, retail investors can buy and sell directly from the Coinbase brokerage, much like they could buy a share in Scottrade or Charles Schwab. Coinbase brokerage fees range from about 1.5% to 4.0%, depending on the user’s payment method; Due to the higher risk, credit cards have higher fees than bank transfers. GDAX operators pay much lower commissions.
Notably, the Coinbase brokerage buys crypto assets from GDAX, rather than an external exchange. This provides the company with a secure source of internal liquidity. Given how often exchanges are hacked or compromised, this is very important; the Coinbase brokerage doesn’t have to rely on anyone else for liquidity.
Coinbase operates in 32 countries and can be divided into four main business lines:
As is logical, the company’s competition has to do with the large Exchange platforms that exist in the market.
Although there is more competition than the three that we are going to mention, these would be some of the most important and relevant competitors of Coinbase
When buying Coinbase shares, the investor will bet on one of the main cryptocurrency exchange platforms. This platform, in addition to being one of the most veteran, maintains notable differences such as the possibility of acquiring digital assets using fiat money.
From the point of view of the company, we are facing one of the largest cryptocurrency exchanges in the world. Its assets exceed $ 20 billion, with more than $ 50 billion traded in cryptocurrencies since its founding.
Coinbase actually has two main products: a broker exchange and a professional trading platform called GDAX. However, both can be used independently.
As we have seen throughout the guide, it is a very interesting asset when it is listed on the market.
We have also seen that, in addition to being able to operate on it with traditional investment mechanisms, it will be possible to operate with contracts for difference: flexible, without commissions and that allow investment in favor and against the asset.
We have also reviewed two of the best brokers on the market with which to buy Coinbase shares: eToro and LiquidityX.