CMC Markets to offer Coinbase trading on Next Generation platform
Online trading company CMC Markets is offering its clients to trade Coinbase’s IPO. Trading of newly listed Coinbase shares will be possible on CMC Markets’ Next Generation trading platform.
Coinbase is the largest cryptocurrency exchange in the United States. It acts as a broker for both retail and institutional traders for crypto assets such as bitcoin, ripple and altcoin. On April 14, 2021, the company is planning on floating its shares via a direct listing on the NASDAQ stock exchange.
Coinbase is due to debut on the stock market on the 14th April 2021 under the ticker ‘COIN’. The listing was initially scheduled for March but had to be postponed due to legal issues. IPOs do not usually go live at the start of the trading session as the exchange needs to do a price discovery phase to calculate the opening price, so traders need to keep an eye out for Coinbase’s IPO going live a couple of hours into the US trading session on the 14th of April.
The company has opted to go public via direct listing instead of the traditional IPO route. The cryptocurrency platform plans to register almost 115 million shares of Class A common stock in a direct listing. This means that it will not be selling any new stock; instead, it will be allowing existing stakeholders to sell their shares to new investors.
Coinbase shares are expected to set traders back by around $400 per share. Analysts expect Coinbase to reach a valuation of approximately $100 billion, although some think that this is overvalued. A more accurate estimation would be around $70 billion.
How to trade the Coinbase IPO with CMC Markets:
- Open an account. A live trading account will give you exposure to over 9,000 shares and ETFs, including Coinbase’s new listing.
- Search for your chosen asset in our Product Library.
- Choose whether you want to open a long position and ‘buy’ or open a short position and ‘sell’.
- Choose your position size and place the trade. Here, you can apply risk-management orders such as stop-losses and take-profit orders.
- Monitor your trade and close out the position when your target price is reached.
There are some of the risks that traders should consider when speculating on Coinbase’s IPO in a potentially profitless bearish scenario:
- Coinbase could fall victim to over-valuation. Supply and demand will have an effect on its share price, meaning that while its shares could boom on its opening day, they could easily go the other way and open at a lower price or decrease throughout the day.
- Coinbase has a number of high-profile competitors including Binance, Gemini, Bithumb and Kraken (which is also considering an IPO for 2022). Some of these platforms may offer cheaper trading services in comparison with Coinbase.
- Some investors see the crypto market as overvalued and suggest that Coinbase’s valuation may decrease when the crypto market cools off. Company analysis including P/E ratios indicate an unusually high number right now, which may fall as time goes on.
It is important to stay up to date with news about Coinbase’s IPO, whether this be relating to company earnings reports, economic announcements or the cryptocurrency market in general.
CMC Markets’ Next Generation trading platform comes with a news and analysis section that is updated daily for all financial markets. The news and insights tools also offer more specific details on the share market, with a Reuters news feed and Morningstar equity research reports. These reports will be released on the platform on the 14th April, after Coinbase stock is available to trade.