How to buy Coinbase shares

By: James Knight

When he isn’t at work, James is an avid trader and golfer who likes to travel. He once fed,… read more.

Updated: May 18, 2021

This guide includes a history of Coinbase and its recent performance to help you decide whether to invest. Find out how to get your own shares as well as the best brokers to use to do so.

Coinbase IPO

Coinbase held its IPO on April 14, 2021. An IPO (initial public offering) is a way for a company to raise capital to fund its business operations by selling shares to the public. This page explains how to buy those shares now that they’re available.

Compare the best Coinbase trading platforms

If you already know everything about Coinbase, sign up to one of the brokers below to get started. They have been approved by our team of financial experts and you can use our reviews to help pick which one works best for your investing strategy. Otherwise, keep reading to learn more about Coinbase.

1

Min. Deposit

$50

Exclusive promotion

User Score

10

Trade/invest in stocks with just $50

Invest for dividends and get payout on stocks on Ex-Dividend day

Over 11 payment methods, including PayPal

Start Trading

more info

Description:

eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro users can connect with, learn from, and copy or get copied by other users. Buying stocks on eToro is free and you can invest with as little as $50.

Payment Methods

Bank Transfer, Wire Transfer

Full regulations list:

CySEC, FCA

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.

2

Min. Deposit

$1

Exclusive promotion

User Score

9.3

0 Commissions and no deposit minimums

Registered with and regulated by SEC and FINRA

Loss of cash protection

Start Trading

more info

Description:

Financial company driven by technology and offering all-in-one self-directed investment platform that provides excellent user experience.

Payment Methods

Full regulations list:

How to buy Coinbase stocks, a step-by-step guide

The stock market isn’t massively complicated, so don’t worry even if you’re new to investing. These are the steps to follow in order to complete your investment:

1. Choose a broker. The first thing you need is an online broker. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
2. Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
3. Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Coinbase shares.
4. Place an order for COIN stock. Search for Coinbase’s ticker symbol (COIN) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you want and place your order.
5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Coinbase shares will be listed in your account. Congratulations, you’ve just bought shares in Coinbase!

What is Coinbase? And should I invest?

Coinbase is the largest cryptocurrency exchange in the United States and one of the most popular in the world. Formed in 2012, it’s ridden the blockchain boom all the way to a valuation of more than $100bn. It listed on the NASDAQ stock exchange in 2021.

It’s the first cryptocurrency exchange to list on the stock market. Cryptocurrency is already a huge industry, with Bitcoin alone accounting for $50bn worth of trading volume every day. Trading on Coinbase makes up about 10% of the total market and the exchange makes its money from transaction fees paid on every trade.

Investing in the early stages of a listing can be more risky. That said, Coinbase might be appealing if you’re interested in cryptocurrency in general, or looking for a way to diversify into new industries. The main competition comes from Binance, which is the largest exchange in the world but has no plans to go public itself just yet.

How has the company performed in recent years?

Very well, which led to the decision to go public in 2021. The exchange has been growing rapidly over the past few years, expanding its user base from 1m in 2014 to more than 40m in 2021. In that time more than $433bn worth of cryptocurrency has been traded on Coinbase.

2020 was the company’s most profitable year so far, as Coinbase registered profits of $300m from more than 30m customers. This is notable, not just for being a lot of money but because many tech start-ups, from Uber and Lyft to Netflix and Airbnb, had never recorded profits ahead of listing on the stock exchange.

Its strong financial performance has led to a steady increase in valuation. In 2018, independent analysis valued Coinbase at $8bn. By late 2020 it was $28bn. Heading into its IPO, it was valued at over $100bn.

Is it a good time to buy Coinbase shares now?

It depends on your confidence in cryptocurrency and how much risk you want to take on. Coinbase’s rise is on the back of demand that sent most coins to all-time price highs in 2020 or 2021. Cryptocurrency is volatile, and new stock market listings tend to be as well, so you have to be willing to accept the possibility that your investment might experience dramatic short term swings.

If you’re taking a more long term view, remember that Coinbase’s business model relies on lots of cryptocurrency trading. There have been times in the past where interest in coins like Bitcoin have plummeted, leading to bear markets (known on the inside as ‘crypto winters’) that lasted for a long time.

Despite that risk, being the first to hit the stock market is likely to solidify Coinbase’s place as one of the most popular exchanges. It’s well placed to take advantage if demand continues to grow, and the best thing to do if you are planning to invest is to keep tabs on the state of the crypto market as a whole. You can use our market analysis to help you:

Buying, selling and trading Coinbase shares for beginners

What to do before buying shares

You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment. 

With that in mind, here’s a checklist to run through before investing in Coinbase shares.

1. Research the company. You should always examine the fundamentals of a company first. What is Coinbase? How did the company get its start? How did it grow? Is Coinbase’s revenue and profit growth picking up? Is the company innovating? The more you know about Coinbase, the better positioned you’ll be to make smart investment decisions.
2. Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
3. Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
4. Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
5. Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our broker reviews can help you find the right platform for you.
6. Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news section can help you keep on top of movements in the financial markets.

What is the difference between buying, selling, and trading shares?

If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade Coinbase shares. Here’s a quick run-through of what’s involved in each.

Buying Coinbase

This process involves finding a broker and placing an order for Coinbase stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.

Selling Coinbase

When you sell any Coinbase shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit. 

When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Coinbase’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading Coinbase

Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade Coinbase shares through dealing shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

Share dealing vs CFD trading

When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.

When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.

Pros

• Can build wealth over time to achieve financial goals
• Don’t need to be very reactive to short-term market movements
• Some stocks will give you an income through regular dividend payments

Cons

• Takes a long time to realise any profits
• Your capital is tied up in stocks and cannot be used for other investments

CFD Trading 

If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to flip stocks fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into COIN shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.

Pros

• Can generate fast profits if you read the market right 
• Some platforms allow you to trade with leverage
• Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

• Trading with leverage is risky and can lead to big losses
• Doesn’t necessarily generate growth over the long term

Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed. 

How to choose a broker

The best place to buy Coinbase shares in the UK is through a broker. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:

• Range of stocks available. The most important thing is that you can actually use the broker to get the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
• Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
• Regulation. You should only use regulated brokers to place trades. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
• Payment methods available. You might want to fund your broker account using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
• Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
• Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.