Coinbase to go public on 4/14 • Hacker News Board

Re: Coinbase to go public on 4/14

#21

Post by endisneigh » Fri, Apr 02, 2021, 3:54 PM UTC

Under what circumstances would it make sense to invest in Coinbase compared to Bitcoin/underlying? Doesn't really make sense if you're bullish on crypto. Even seed investors who invested in Coinbase when it was founded would've been financially better off just buying Bitcoin/underlying.

The situation here is unique because all of the popular coins have fixed supplies so any increase of popularity will have the commensurate increase in price. I don't see any situation in which Coinbase grows in price faster than the underlying.

Re: Coinbase to go public on 4/14

#22

Post by xeromal » Fri, Apr 02, 2021, 3:57 PM UTC

endisneigh wrote: post #21

Under what circumstances would it make sense to invest in Coinbase compared to Bitcoin/underlying? Doesn't really make sense if you're bullish on crypto. Even seed investors who invested in Coinbase when it was founded would've been financially better off just buying Bitcoin/underlying. The situation here is unique because all of the popular coins have fixed supplies so any increase of popularity will have the commen…

Not saying this is true for Coinbase specifically, but sometimes it's better to sell shovels during a gold rush than dig for gold itself.

Re: Coinbase to go public on 4/14

#23

Post by kurko » Fri, Apr 02, 2021, 4:00 PM UTC

endisneigh wrote: post #21

Under what circumstances would it make sense to invest in Coinbase compared to Bitcoin/underlying? Doesn't really make sense if you're bullish on crypto. Even seed investors who invested in Coinbase when it was founded would've been financially better off just buying Bitcoin/underlying. The situation here is unique because all of the popular coins have fixed supplies so any increase of popularity will have the commen…

I guess only if Coinbase stock price was set in Bitcoin. That way, as btc increases, so would the equivalent stock price in dollar.

Re: Coinbase to go public on 4/14

#24

Post by runawaybottle » Fri, Apr 02, 2021, 4:12 PM UTC

endisneigh wrote: post #21

Under what circumstances would it make sense to invest in Coinbase compared to Bitcoin/underlying? Doesn't really make sense if you're bullish on crypto. Even seed investors who invested in Coinbase when it was founded would've been financially better off just buying Bitcoin/underlying. The situation here is unique because all of the popular coins have fixed supplies so any increase of popularity will have the commen…

I think Coinbase might own a lot of Bitcoin in general.

Re: Coinbase to go public on 4/14

#25

Post by blhack » Fri, Apr 02, 2021, 4:14 PM UTC

Absolutely fantastic news. Congratulations to the entire coinbase team!

(Now please do better at customer service <3)`

Re: Coinbase to go public on 4/14

#26

Post by lacker » Fri, Apr 02, 2021, 4:17 PM UTC

endisneigh wrote: post #21

Under what circumstances would it make sense to invest in Coinbase compared to Bitcoin/underlying? Doesn't really make sense if you're bullish on crypto. Even seed investors who invested in Coinbase when it was founded would've been financially better off just buying Bitcoin/underlying. The situation here is unique because all of the popular coins have fixed supplies so any increase of popularity will have the commen…

There are plenty of possible outcomes that would be better for Coinbase than for Bitcoin. Popularity of Ethereum, any other coins, or other sorts of crypto-based financial instruments. So far Bitcoin has done well but past performance does not necessarily predict future results.

Also, anyone who holds index funds and no cryptocurrency, that strategy essentially ends up in them holding some Coinbase but no Bitcoin.

Re: Coinbase to go public on 4/14

#27

Post by berberous » Fri, Apr 02, 2021, 4:19 PM UTC

nwhatt wrote: post #2

If I were to invest $100 in some allocation of Coinbase stock and Bitcoin - what should the ratio be?

$80 ETH $10 BTC $10 COIN

Re: Coinbase to go public on 4/14

#28

Post by endisneigh » Fri, Apr 02, 2021, 4:19 PM UTC

lacker wrote: post #26

endisneigh wrote: post #21

Under what circumstances would it make sense to invest in Coinbase compared to Bitcoin/underlying? Doesn't really make sense if you're bullish on crypto. Even seed investors who invested in Coinbase when it was founded would've been financially better off just buying Bitcoin/underlying. The situation here is unique because all of the popular coins have fixed supplies so any increase of popularity will have the commen…

There are plenty of possible outcomes that would be better for Coinbase than for Bitcoin. Popularity of Ethereum, any other coins, or other sorts of crypto-based financial instruments. So far Bitcoin has done well but past performance does not necessarily predict future results. Also, anyone who holds index funds and no cryptocurrency, that strategy essentially ends up in them holding some Coinbase but no Bitcoin.

I don't understand that. Can you spell out the circumstances in which Coinbase increases in price faster than any of the underlying?

For the sake of discussion let's say you can either own some amount of Coinbase or a weighted average of the top 5 coins offered on Coinbase itself.

In my view any instrument or tool that leverages a coin with a fixed supply means more popularity which means higher price for the coin. In the end Coinbase absorbs much of the benefit as it has expenses. I don't see any scenario in which Coinbase is more successful than a basket of the underlying.

Now if coins were inflationary I could understand, but they're not. Seems dumb to buy Coinbase IMHO.

Re: Coinbase to go public on 4/14

#29

Post by freedomben » Fri, Apr 02, 2021, 4:22 PM UTC

endisneigh wrote: post #21

Under what circumstances would it make sense to invest in Coinbase compared to Bitcoin/underlying? Doesn't really make sense if you're bullish on crypto. Even seed investors who invested in Coinbase when it was founded would've been financially better off just buying Bitcoin/underlying. The situation here is unique because all of the popular coins have fixed supplies so any increase of popularity will have the commen…

I'm not much of an investor, but I would probably do both. Coinbase is (or at least was) an important company for making bitcoin and other cryptos usable for the general public. If you only bought bitcoin and coinbase and other exchanges died on the vine, it hurts your value.

Also diversification is a good thing.

Re: Coinbase to go public on 4/14

#30

Post by ropiku » Fri, Apr 02, 2021, 4:24 PM UTC

thebean11 wrote: post #13

DamnYuppie wrote: post #12

Earlier quoted context omitted.

The best way to get into Crypto from a traditional brokerage account is GBTC. It tracks mainly BTC and Ethereum. It is not a perfect match though, sometimes you pay a premium and sometimes you get a discount to the underlying cryptos. Currently it is at nearly a 18% discount where earlier in the year it was at a 10% premium (GBTC is currently 50.87, BTC is $59,515). This is by no means a GREAT way to do it, just the…

Wow, I figured it always traded at a premium. 18% discount is huge, am I missing some downside of this arb opportunity (buy GBTC sell short BTC or BTC futures)?

GBTC has no redemption mechanism, you can wrap more BTC into GBTC but not the other way around. For ETFs this is what solves the arb. You can do your arb but you still need to offload GBTC at some point and the only option is to another buyer of GBTC.