Coinbase Stock: Is It A Buy Right Now After 390% Surge In 2023?

After cryptocurrencies — especially bitcoin and ethereum — rebounded in 2023, Coinbase (COIN) remains at the forefront of the cryptocurrency industry. After COIN stock’s 391% surge in 2023, is Coinbase stock a buy in the current stock market rally?

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Coinbase Stock IPO

The crypto giant launched its direct listing on the Nasdaq on April 14, 2021, pricing at 250 a share. Coinbase stock shot up nearly 72% to 429.54 before closing its first day of trading at 328.28, up 31.3%, for a valuation of $87.3 billion.

Coinbase is the largest U.S. cryptocurrency exchange. It lists about 50 cryptocurrencies for trading, led by bitcoin and ethereum. Bitcoin is the largest digital coin by market value and was up about 155% in 2023, according to MarketWatch. And Ethereum was up around 94% in 2023, as of Dec. 29.

Coinbase generates 90% of its revenue from retail transactions, which is highly correlated with crypto asset prices, according to a Dec. 5 research note from Needham analyst John Todaro. But retail crypto engagement is considerably lower than in prior years and has been fairly muted despite recent price gains.

Stock Market ETF Strategy And How To Invest

Coinbase Stock Fundamental Analysis

Expectations for a bitcoin ETF, which have now been realized, the halving of mining rewards and possible Federal Reserve interest rate cuts are the three catalysts driving Coinbase’s recent gains, according to Needham analyst John Todaro. “What gave us confidence to raise our price target is that there remains a lot of capital still sidelined,” he wrote in a comment to IBD.

In early December, Needham hiked its price target for Coinbase stock on expectations the exchange still has room to run with retail traders waiting on the sidelines. Needham expects the cryptocurrency frenzy to resume and hoisted its price target on Coinbase stock to $160 from $120.

On Jan. 10, the Securities and Exchange Commission finally approved a slew of spot bitcoin ETFs following months of anticipation.

The SEC gave the green light to 11 issuers that applied for bitcoin exchange-traded funds in the first wave of approvals. The filing listed ETFs from ARK Invest (ARKK), BlackRock (BLK), VanEck, WisdomTree, Fidelity, Invesco, Franklin, Hashdex and Valkyrie.

The cryptocurrency exchange reported third-quarter results Nov. 2 that topped expectations. Coinbase narrowed its per-share loss to a penny on revenue of $674.2 million. Sales grew 14% vs. the year-ago period.

COIN Stock Technical Analysis

On Nov. 24, shares broke out past a cup base’s 114.43 buy point, according to IBD MarketSmith. Coinbase stock is trading around 31% above that buy point after sharp losses in recent trading days.

According to the IBD Stock Checkup, Coinbase stock boasts a 96 out of a perfect 99 IBD Composite Rating. The Composite Rating helps investors easily measure a stock’s fundamental and technical metrics.

Is Coinbase Stock A Buy Right Now?

Coinbase stock dived 6.7% Thursday, hitting its lowest level since mid-December. COIN stock continues to hold above its 114.43 buy point in a cup base. Shares traded around 141 a share Thursday.

The price of bitcoin inched lower Thursday, trading around $46,300, according to CoinDesk.

COIN stock is not a buy right now because it is far extended from its previous buy point after big gains in recent months. Wait for the stock to form a new base before purchasing shares.

For more leading stocks and stocks approaching buy points, check out these IBD Stock Lists, like the Stocks Near Buy Zones. To see the current stock market trend, check out IBD’s signature daily analysis, The Big Picture.

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