8 experts weigh in on what Coinbase adding dogecoin means for the meme cryptocurrency

Cryptocurrency representations are seen in front of the dogecoin logo.

  • Dogecoin may have started as a joke in 2013 but the cryptocurrency has seen very real gains in 2021.
  • Coinbase in May responded to customer demands, and said retail users can sell, buy, and store dogecoin, joining the ranks of other major exchanges.
  • Insider asked eight experts what they think of dogecoin’s listing on the largest US crypto exchange.
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Dogecoin may have started as a joke in 2013, but few are laughing at its hefty gains after the famous meme token catapulted to a market valuation of around $90 billion at one point in April.

More recently, Coinbase, the largest cryptocurrency exchange in the US, said retail traders can sell, buy, and store dogecoin. The company, with its 56 million verified users, paired the announcement with plans to give away $1.2 million worth of prizes in dogecoin to encourage users to take advantage of its newest cryptocurrency trading option.

The move came two days after Coinbase said Coinbase Pro users can transfer dogecoin into their accounts. Dogecoin surged 41% on the news.

A tweet from Elon Musk hours after further spurred the token’s rally.

Dogecoin has rocketed nearly 8,000% this year, far surpassing bitcoin’s nearly 30% gain and ether’s 260% climb.

The shiba inu-themed token goes through wild price swings but some analysts do not seem too bothered.

“The price action in doge is extremely volatile but is ultimately driven by supply and demand with real capital,” Jeffrey Wang, head of Americas of Amber Group, a crypto financial services firm, told Insider. “I think the price moves in doge are a great example of free capital markets in action.”

Coinbase joins Gemini and eToro, which both listed the meme token in May this year, as well as Kraken and Binance. Combined, the exchanges effectively open up the meme token to tens of millions of users worldwide.

While the listing is viewed as a stamp of approval by some, others like Peter Jensen, CEO at RocketFuel Blockchain, a global payments company, view the decision of Coinbase as just a strategic business move.

“Exchanges like Coinbase Pro and eToro have enlisted doge only because of the massive inflow of retail user base that dogecoin is getting, which in turn means it’s a profit-generating coin for exchanges,” Jensen told Insider.

Jensen added that unless a major technological upgrade is given to dogecoin, it will remain to be a highly speculative asset without any technological merits.

Here are what eight other experts think of dogecoin’s recent listing:

Wait, but why?

“Dogecoin’s popularity is really just a by-product of the meme-populist age. In essence, it’s a fun way for people to transact and get involved in crypto and investing. Doge is unlikely to have any “use-case” even in the loose sense of the term. It’s important to realize that even the creator Billy Markus sold off all of his dogecoin holdings. Doge can’t compete with bitcoin in the long run because bitcoin has limited supply, and is emerging as a sort of “digital gold.” It can’t square off against ethereum either due to ETH’s smart contract and decentralized app functionality. On its own, it has nothing to offer. So I don’t see this as a watershed moment for dogecoin legitimacy.” – Muneeb Jan, author, Macro Geek Newsletter

“Coinbase is just responding to this popularity. I don’t view dogecoin as being legitimized. Coinbase is an exchange, there are no institutions buying it seriously. Since its supply is unlimited, there are 10,000 new coins mined every minute. This makes it highly inefficient as a legitimate crypto coin except to those that use its volatility to trade it and hang on Elon Musk’s tweets to pump up its value. Even today, Musk’s tweets and mentions of dogecoin seem satirical, not serious. I’m not a fan of hype around dogecoin because it’s a distraction from the useful things being done in blockchain and in crypto, like DeFi.” – Andrew Kiguel, cofounder and CEO, Tokens.com

“We still view this as speculative at best. I think the biggest implication is that many small investors will lose money. The broad crypto landscape, in my opinion, is a combination between a pyramid scheme and the wild west. There are people that will make a lot of money, but there are also a lot of folks who will lose. There are some more legitimate currencies; however, there are also hundreds that are nothing more than ideas. Those that are looking at longer term placeholders for wealth will buy more established cryptos like ether or bitcoin and simply hold.” – Randy Carver, financial expert

“As more crypto brokers begin to offer dogecoin, I see its popularity increasing, but it will take time before it is fully accepted. While socially active, lower account size retail investors are interested in dogecoin and crypto’s in general, active retail investors who trade equities and equity options have largely stayed on the side of crypto trading. With only 50,000 permissible daily transactions of dogecoin, it is a generation away from wider acceptance with retail and institutional investors.” – Dan Raju, CEO, Tradier

It’s about time.

“While a little late, the Coinbase listing is yet another positive sign for the doge community. While it began as a joke, doge’s track record has earned it a place amongst ‘legitimate’ digital assets. While the technology itself hasn’t evolved much, doge has an incredible community and the power of that should not be underestimated. It may have taken Elon Musk and other influential figures to drive awareness and convince institutions of dogecoin’s legitimacy, but as a peer-to-peer network, it’s been widely used for nearly a decade.” – Jason Lau, COO, Okcoin

“The meme currency is now firmly in the mainstream. It’s likely that we’ll see even more interest and adoption from retail investors in the short term, as well as some current doge holders cashing out. Long-term, we simply don’t know; interest in doge may wane, or growing popularity may force traditional financial institutions to re-think what counts as a legitimate asset class. As global adoption continues, the cryptocurrency trading landscape is set to evolve with it. Dogecoin is a representation of how everyday internet users can shape markets when they have the opportunity.” – Philip Gradwell, chief economist, Chainalysis

“Dogecoin getting listed by Coinbase, Gemini, and eToro shows that cryptocurrencies with very strong communities and positive sentiment cannot be ignored, even if they are meme coins. At the end of the day exchanges make money from trades and listing popular cryptocurrencies is good for business as long they are not securities. Liquidity and wide exposure should help dogecoin reach an even larger audience. Originally a meme coin, dogecoin is now a more legitimate digital currency in the eyes of new crypto users than the rest of the field.” – Ian Balina, founder and CEO, Token Metrics

“With the listing of dogecoin on Coinbase, one of the most reputable exchanges, it creates a lot of momentum as well as liquidity. This drives the price up and creates a positive feedback loop on the momentum. I think Coinbase made a significant choice as it ultimately signals that even if coins are created initially as a joke, with enough momentum and a strong community, it can become something much greater. It’s no surprise that doge started as a joke, but with the recent momentum and price action, I think it has created a positive feedback loop of luring back in developers and entrepreneurs and institutions.” – Ben Weiss, CEO, CoinFlip

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Coinbase stock could climb 22% as the company is a ‘one-stop shop’ crypto ecosystem, Wedbush says

coinbase direct listing
People watch as the logo for Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, is displayed on the Nasdaq MarketSite jumbotron at Times Square in New York, U.S., April 14, 2021.

  • Wedbush tagged Coinbase with an “outperform” rating and $275 price target on Wednesday, which would be a 22% increase from Wednesday’s close.
  • Analysts led by Moshe Katri said the company is a “one-stop shop” crypto ecosystem.
  • Katri laid out four reasons why he believes Coinbase stock is set to outperform.
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Coinbase stock could climb 22% from current levels because the company is a “one-stop shop” crypto ecosystem, according to Wedbush analysts.

In a note to clients on Wednesday, analysts led by Moshe Katri initiated coverage on Coinbase Global with an “outperform” rating and a $275 price target.

The price target represents a potential 22% increase from Wednesday’s closing price of $224.80.

We view COIN as a “one-stop shop” platform, enabling roughly 56MM retail users, 8,000 institutions, and 134,000 ecosystem partners in over 100 countries to participate in the crypto economy,” Katri wrote.

Katri and a team of Wedbush analysts went on to describe four factors that give them confidence in Coinbase stock moving forward.

First, they detailed Coinbase’s “first-mover” advantage. The analysts said that Coinbase is the “default starting place for new user journeys into the crypto economy” and noted that over 90% of retail users enter the platform organically or through word-of-mouth.

The second factor that the Wedbush analyst said gives them confidence in Coinbase is the company’s dominant and growing share of crypto assets.

According to Coinbase’s SEC filings, the company holds 11.3% of the entire crypto market capitalization.

The third factor that Wedbush’s Katri highlighted in his note to clients was the integration of blockchain technology and traditional finance on Coinbase that enables cryptocurrencies to become part of the payments eco-system.

According to Wedbush, COIN “creates trusted and easy-to-use products, crypto assets that can be dynamically transmitted, stored, and programmed to serve the needs of an increasingly digital and globally interconnected economy.”

Finally, Wedbush analysts highlighted the growing diversification of revenue streams at Coinbase as a bullish factor for the stock.

Coinbase has moved to create an entire web of ancillary services tied to the crypto market. For example, customers can now borrow cash using bitcoin as collateral on the platform.

Wedbush’s analysts also noted that in the first quarter, on average, 25% of retail users who invested in cryptocurrencies on Coinbase also engaged with at least one non-investing product.

The Wedbush team arrived at its $275 price target for Coinbase by using a 22.7x multiple on 2022’s earnings, assuming a 20% growth rate for revenue and EPS.

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Coinbase will continue to trade on 2 European exchanges after a data error threatened the crypto exchange with delisting

coinbase direct listing
The Coinbase logo on display in Times Square in New York City.

  • Coinbase shares will remain listed on the Frankfurt Stock Exchange and the Xetra trading system.
  • The shares had faced delisting because of a reference code error.
  • “Missing reference data” for Coinbase was available, said Deutsche Borse’s Xetra.
  • See more stories on Insider’s business page.

Coinbase shares will continue to trade on two European trading venues run by Deutsche Boerse as a coding error with the cryptocurrency platform has been resolved.

The company’s shares had faced delisting from the Xetra trading system and the Frankfurt Stock Exchange by the end of Friday because of a mistakenly used individual 20-digit identification code, or LEI.

“The missing reference data (LEI) is now available for #Coinbase and thus, the shares will not be delisted … but rather be tradable on #Xetra und Börse Frankfurt further on,” Xetra said on its Twitter page Thursday.

Shares of Coinbase, the largest cryptocurrency exchange in the US, became tradable on the floor of the Frankfurt Stock Exchange last Wednesday when the company’s direct listing debuted in the US on Nasdaq.

Coinbase’s public listing has been called a milestone for the industry surrounding digital coins, tokens and blockchain technology.

Shares of Coinbase traded on Nasdaq fell more than 2% during Thursday’s session, below $309 each. The shares started trading last week, ending their first session at $328.28.

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Coinbase faces delisting on 2 European exchanges over reference code error

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Coinbase made its trading debut on Nasdaq this month.

  • Coinbase shares may be delisted from two European exchanges because of a coding error.
  • “A correct LEI code is a regulatory requirement for admission to trading in Europe,” said trading system Xetra.
  • The situation can be remedied with an application for an LEI, said Xetra.
  • See more stories on Insider’s business page.

Coinbase shares face delisting this week from two European trading venues run by Deutsche Boerse because of a coding error with the cryptocurrency platform.

The shares could be removed from the Xetra trading system and the Frankfurt Stock Exchange by the end of Friday, each said on their Twitter feeds on Wednesday.

Xetra said traded securities must meet various criteria, including having an LEI, or an individual 20-digit identification code.

“When Coinbase commenced trading, a LEI code was mistakenly used for a Coinbase entity that is not attributable to the entity introduced last week (Coinbase Global Inc.). A correct LEI code is a regulatory requirement for admission to trading in Europe,” wrote Xetra. “The only way for Coinbase to resume trading is for the issuer to apply for an LEI,” it said.

Coinbase became tradable on the Frankfurt stock exchange’s trading floor last Wednesday when the company’s direct listing debuted in the US on Nasdaq. Coinbase is the largest cryptocurrency exchange in the US and its going public has been called a milestone for the industry surrounding digital coins, tokens and blockchain technology.

Nasdaq-traded shares of Coinbase were up nearly 2% during Wednesday’s session. The stock reportedly was rated as a buy at Rosenblatt Securities on Wednesday.

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Coinbase pulled in $57 million from retail investors during its trading debut, the 5th-most-popular offering since 2017

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Coinbase is set to directly list on the Nasdaq on Wednesday.

  • Retail investors poured $57 million into Coinbase shares during its first day of trading Wednesday.
  • Coinbase’s debut is the fifth most popular for retail investors in four years, says VandaTrack.
  • Coinbase shares were up during their second session of trade.
  • See more stories on Insider’s business page.

Coinbase‘s trading debut drew in more than $57 million from retail investors, putting the cryptocurrency exchange among the most popular stocks to go public in the last four years, according to figures released Thursday.

Retail investors poured in $57.35 million into Coinbase on Wednesday when its direct listing on Nasdaq went live publicly, according to VandaTrack, which monitors retail investing activity in 9,000 individual stocks and ETFs in the US.

Coinbase accounted for nearly 7% of net purchases made by retail investors on Wednesday, with total purchases of US stocks and ETFs coming in at US$822 million.

Coinbase’s public debut was the fifth largest in terms of retail buying for newly listed shares since 2017, VandaTrack estimated. The largest was for Snap, with the social media company taking in $143 million in its first day of trading in March 2017. More recently, Rocket Companies, which runs personal finance and consumer service brands including Rocket Mortgage, logged $58 million from retail investors when it went public in August.

The collective profile of retail investors has been raised during the coronavirus pandemic in part as people have used stimulus money and time spent indoors during lockdowns working to make money from the stock market. A recent study by Charles Schwab released showed that 15% of all US stock markets investors began investing in 2020.

In the highly anticipated debut, Coinbase’s market value swelled to an intraday high of $112 billion, surpassing those of some of the largest companies in the US.

Coinbase shares during Thursday’s session rose, trading above $334 each. They finished Wednesday’s session at $328.28, below their open opening price of $381.

Read more: BTIG identifies 14 beaten-down stocks poised to dominate the market this earnings season and extend their track record of crushing expectations

Coinbase day one retail investing
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Coinbase’s eye-popping $100 billion valuation is reasonable for a disruptive, cutting-edge crypto firm, an early backer says

puppies in the Coinbase office
  • Santosh Rao, the head of research at Manhattan Venture Partners, believes a $100 billion valuation for Coinbase is reasonable.
  • Manhattan Venture Partners was an early investor in Coinbase, Palantir, Draft Kings, and more.
  • Based on estimated 2022 figures, Coinbase will trade at around 11x sales and 27x EBITDA with a $100 billion valuation.
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Coinbase is set to make its public trading debut on Wednesday and some market commentators are questioning its lofty valuation. Manhattan Venture Partners, an early backer of the crypto exchange, believes the massive figure is justified.

Santosh Rao, the head of research at the merchant bank, says a $100 billion valuation for Coinbase is “totally reasonable” given the disruptive nature of the crypto firm.

Manhattan Venture Partners was an early investor in Coinbase as well as a number of other big-name tech companies like SpaceX, Palantir, and Draft Kings.

Rao sat down with CNBC on Wednesday to discuss Coinbase’s public debut and his firm’s investments.

The head of research highlighted the fact that based on estimated revenues and earnings for 2022, at a roughly $100 billion valuation, Coinbase will trade at just over 11x sales and 27x EBITDA.

Those figures aren’t outlandish for a company that has demonstrated consistent growth, according to Rao.

Coinbase released impressive first-quarter results on April 6 that showed a 117% quarter-over-quarter increase in monthly transacting users. The company also earned more revenue in the first quarter of 2021 ($1.8 billion) than it did in all of 2020 ($1.3 billion).

The rising revenue came amid a historic run for bitcoin that saw the cryptocurrency rise more than 300% in 2020, and an additional nearly 100% in the first quarter of 2021 alone.

Some market commentators are predicting a further 10%+ breakout moving forward as well.

When asked whether crypto prices need to keep going higher in order for Coinbase to maintain its lofty valuation, Rao said it would help, but argued the company has a range of services on offer to offset any downfall in crypto prices.

“That’s their core business at this point, but they have other services too. And they have a subscription product coming up, a whole range of services, the custody services, they have a number of other levers to pull as they go up,” Rao said.

Read more: Bitcoin is a headache to store, and that’s created an investment opportunity that could theoretically pay determined traders big risk-free returns by December

The head of research added that, in his view, there’s no reason why crypto prices should stop going up as investors are starting to realize the space will become “an integral part of the financial system going forward.”

Rao also noted that of the best features of Coinbase is that it’s “agnostic” towards individual cryptocurrencies, meaning if bitcoin falls and other cryptocurrencies rise, Coinbase will still benefit.

The head of research at Manhattan Venture Partners ended the interview by saying that Coinbase has the breadth, scale, and technology to keep competitors at bay over the long haul.

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