Coinbase: how to buy and short Coinbase shares
Coinbase (COIN) is a US cryptocurrency exchange that went public on 14 April 2021. Find out how to buy and short Coinbase shares, as well as how to analyse the Coinbase share price.
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Leverage isn’t available for investments, so you’ll need to commit the full value of the position upfront. While this can increase your initial outlay, it also caps your risk. For example, if you invested £1000 in Coinbase shares, your maximum risk is set at £1000 – assuming that the share price falls all the way to £0.
With us, you can invest from zero commission on US shares and from £3 commission on UK shares. These rates are available to clients who opened three or more positions on their share dealing account in the previous month. Remember that investments can fall in value as well as rise, so you may receive back less than you initially invested.
Here’s how our share dealing commissions match up to our competitors:
|Provider||IG||Hargreaves Lansdown||AJ Bell|
|Best commission rate on US shares||Free||£5.95||£9.95|
|Standard commission rate on US shares||£10||£11.95||£9.95|
|FX conversion fee||0.5%||1.0%||1.0%|
|Best commission rate on UK shares||£3||£5.95||£4.95|
|Standard commission rate on UK shares||£8||£11.95||£9.95|
|How to qualify for the best rate||Open 3 or more positions on your share dealing account in the previous month||20 or more trades in prior month||n/a|
Coinbase: our market analysis
Commentary by Joshua Mahony, IG Senior Market Analyst
The Coinbase IPO adds a fresh layer of legitimacy for the cryptocurrency sphere, with the valuation of $86 billion meaning that the company is valued above some historic UK-listed names such as BP, Shell, and Barclays.
While investors have been increasingly able to invest in crypto through miners such as Argo Blockchain, Riot Blockchain, and Marathon Digital, the sheer size of this Coinbase listing brings the kind of liquidity and size needed for funds to invest.
Crypto bulls have long looked towards key targets such as a Bitcoin ETF as a means to bring cryptocurrencies into the mainstream. But, the likely correlation between Coinbase and coin pricing will make this a great proxy for investors to gain exposure to the sector without the risks involved in storage.
The volatility seen in the first day of trading comes as no surprise, with many such lofty tech valuations often bringing significant uncertainty when the company first lists. Casting our minds back to the widely anticipated Facebook IPO in 2012, an initial collapse from $38 to $17 brought plenty of calls that the IPO had been overvalued.
However, much like other tech names before them, the initial volatility on entering the market does not necessarily signal that Coinbase is a bad investment per se. Undoubtedly, the Coinbase valuation will be intrinsically linked with the direction of crypto prices, which are notoriously volatile.
Coinbase: a brief history
Coinbase was founded in 2012 by Brian Armstrong – who serves as the current chief executive officer (CEO) – and Fred Ehrsam. The company is headquartered in San Francisco, and it acts as a cryptocurrency exchange and broker for bitcoin, bitcoin cash, ether, litecoin and others.
What is Coinbase’s business model?
Coinbase’s business model is based on its two core products. The first is an exchange for trading the aforementioned cryptocurrencies – known as a Global Digital Asset Exchange (GDAX). The second is a user-facing platform for trading bitcoin, bitcoin cash, ether, litecoin and others.
Coinbase offers accounts to potential clients for cryptocurrency trading. In total, the company offers over 25 cryptocurrencies to its users, some of which are niche opportunities referred to as ‘altcoins’ because they are not widely known in the cryptocurrency mainstream and don’t have the name recognition of bitcoin, ether or litecoin.
The company charges a commission fee for its users to use its platform and its users can trade with leverage. It has two accounts: regular and pro. The regular account charges higher commissions, while the company’s pro account has lower commission fees for users.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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