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As the cryptocurrency market explodes once again, crypto broker Coinbase (NASDAQ: CBASE) recently announced it will offer a direct listing for its initial public offering (IPO). Though inside investors will have the opportunity to sell their shares on the pre-IPO Nasdaq Private Market, retail investors will need to wait for the stock to begin trading on the NASDAQ.
Our guide to Coinbase’s IPO will help you invest in this major broker as soon as Coinbase shares can be publicly bought and sold.
How to Buy Coinbase IPO Stock Summary:
- Step 1: Pick a brokerage
- Step 2: Decide how many shares you want to buy
- Step 3: Choose your order type
- Step 4: Execute your trade
When is the Coinbase IPO (CBASE) Date?
Though Coinbase has not yet announced an official date for its IPO, rumors say that Coinbase stock may be listed in late February or early March 2021.
Coinbase Financial History
Coinbase has a history of volatile expectations from investors, which may make it more challenging to effectively evaluate the company before it goes public.
Coinbase has chosen a direct listing, which means that it forgoes the traditional process of allowing investment banks to investigate the company and assign an opening value for the stock’s IPO. Coinbase’s last formal valuation occurred in 2018, when it accepted $300 million in new financing. At this time, the company was estimated to be worth about $8 billion.
However, this valuation doesn’t take into account the massive success that major cryptocurrencies like Bitcoin and Ethereum have seen since 2018. Bitcoin alone has increased in value from about $4,000 per coin in early 2019 to over $50,000 per coin in February 2021.
Based on the price of shares currently changing hands on the Nasdaq Private Market, experts estimate the company may be worth nearly $77 billion as price discoveries continue between inside investors.
Many cryptocurrency investors maintain that Coinbase’s IPO will add a new layer of legitimacy to the market and set the tone for future crypto brokers to go public. Investors hope that by complying with traditional financial regulations, cryptocurrency brokers like Coinbase will confer more public trust in the market, which has long been panned by investing experts and regulators thanks to its decentralized nature.
Bitcoin’s pop in value isn’t only beneficial for Coinbase as a company. As more coverage of the cryptocurrency market makes its way into the mainstream, competitors like Robinhood, Kraken, PayPal and additional brokers are also allowing their users to buy and sell major cryptocurrencies with lower fees and sometimes no commission.
However, more competitors in the cryptocurrency sphere cannot match the services that Coinbase offers, including margin trading and a more advanced Coinbase Pro platform for experienced or particularly active investors. Coinbase also offers a wider selection of cryptocurrencies when compared with some competitors that offer access to both the stock and crypto markets.
How to Buy Coinbase IPO (CBASE) Stock
Though Coinbase’s stock is currently only trading between private investors on the Nasdaq Private Market, retail investors can prepare to invest in public shares of Coinbase as soon as it enters the market.
If you’re familiar with the process of how to buy stocks, you can use your current brokerage account to prepare for Coinbase’s IPO. If not, use these steps to get started.
Step 1: Pick a brokerage.
A broker is a financial service company that offers retail investors a trading platform that they can use to buy and sell shares of stock online. Before you can buy or sell stock, you must choose a broker and open your brokerage account.
Some of the factors you might want to consider when you choose the best broker for your needs may include:
- Commissions and fees: Though many brokers now offer commission-free trading, you shouldn’t assume that your broker will allow you to buy and sell stocks with no fees. Be sure to know and understand your broker’s fees before you open an account.
- Trading platform: Some brokers offer simple and streamlined trading platforms aimed at investors who have never bought or sold shares of stock before. Other brokers focus on offering a wide range of educational resources and analysis tools that you can use to enhance your investing experience. You may want to watch a few video demonstrations before selecting a broker to be sure that you’re opening an account with a platform you’ll be able to use effectively.
- Access to additional markets: If you’re only interested in buying Coinbase stock once it is publicly listed, you’ll be able to invest effectively using any brokerage platform that offers NASDAQ access. However, if you want to invest in additional securities like options contracts, cryptocurrencies, futures contracts and precious metals, choose a broker that offers a single platform for all of your interests.
Not sure how to begin comparing brokers? Consider a few of our top choices below to make the search a little simpler.
Step 2: Decide how many shares you want.
After you’ve opened your brokerage account, keep track of how the share price of Coinbase is moving in the days up to its IPO. You can track and view the Nasdaq IPO calendar here. Though there is currently not a published IPO date, Coinbase will likely announce its IPO date once it is finalized through its social media channels and via the Nasdaq calendar.
When the shares of Coinbase stock begin trading, decide how many shares you want to purchase based on the total amount of money that you can afford to invest. Note that it’s normal for share prices of stocks going public to dip after opening, as investors connected with the inner workings of the company have access to Nasdaq’s private listing before the general public. As is the case with any stock, never invest more money than you can afford to lose, as stock prices can dip suddenly and without warning.
Step 3: Choose your order type.
After deciding how many shares of stock you want to buy, 1 of the final steps you’ll need to take is to decide which type of order you want to place. The order type you choose dictates how much money you’ll pay for each share of Coinbase stock you buy, when your order is executed and more.
Some of the most common types of stock orders you’ll see may include:
- Market orders: A market order tells your broker that you’d like to execute your stock order at the current market rate. For example, if shares of Coinbase stock are currently trading at $200 a share and you place an order to buy 10 shares of stock at the current market rate, you’ll likely pay around $200 per share of stock you buy.
- Limit orders: A limit order tells your broker that you want to buy a select number of shares of stock at or below a specified price. When you place a limit order, you’ll specify a maximum price that you’re willing to pay for each share of stock you buy in addition to the number of shares you want to purchase. For example, you might place a limit order with a limit price of $200 per share of Coinbase stock. If your broker is able to execute your order at or below a price of $200 per share, your broker will carry out the order. If the price of Coinbase stock doesn’t fall to $200 or lower throughout the trading day, your broker will not fill the order.
The broker that you choose will dictate which types of orders you can place and how much (if any) commission you’ll pay per order.
Step 4: Execute your trade.
After you have chosen an order type and decided how many shares of stock you want to buy, double-check your order details before submitting the order. After you submit your order, your broker will take care of executing the order according to your specific instructions.
If your broker is not able to fill your order (for example, because the limit price isn’t reached during the trading day), it may leave it open indefinitely or cancel the order at the end of the day according to your preferences.
Invest Coinbase IPO Stock
Though Coinbase announced in January 2021 it would be going public, the company still has not announced an official IPO date. Keeping track of both Coinbase’s social media presence and the Nasdaq IPO calendar will ensure you’re among the 1st to know when a public offering date is announced to retail investors.
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