Coinbase has managed to establish itself as a leading bitcoin exchange and has been labeled the first “bitcoin unicorn” as the private company was valued at $1.6 billion during its last funding round earlier this year. Needless to say, Coinbase would make for an interesting investment, given its market-leading position in the booming cryptocurrency sector.
San Francisco-based Coinbase was launched in 2012 to provide cryptocurrency investors with the opportunity to buy and sell bitcoin and other digital assets. In the past six years, the company has managed to grow its user base to over 13 million worldwide and even topped the Apple store’s most downloaded apps during the height of the bitcoin bull market in late 2017.
Since the start of the year, Coinbase has made several strategic hires and acquisitions to expand its business model to become a diversified cryptocurrency and blockchain company with the goal of building “an open financial system for the world.”
How to Invest in Coinbase
Currently, Coinbase is a privately held company, which means its shares are not publicly traded on a stock exchange. That means the only way to purchase shares in the company is through private share transactions with existing investors in the company.
However, to purchase shares in a private company in the U.S., you need to be an accredited investor and you will need to source shares from existing investors who are willing to sell a part of their holding in the company.
To qualify as an accredited investor, you will need to prove that you have a net worth of over $1 million (excluding the value of your house) or have at least an annual income of over $200,000. Hence, this option is only available to high-net-worth individuals.
Additionally, should you qualify as an accredited investor, finding an existing Coinbase investor who will be willing to sell you Coinbase stock at a reasonable price will most likely prove to be a difficult task given the company’s potential for growth.
Buy Cryptocurrencies as a Proxy For Coinbase Stock
Given how difficult it is to buy Coinbase stock, private investors can instead gain indirect exposure to the success of Coinbase by investing in digital assets – especially the ones that Coinbase supports on its exchange – and by investing in the blockchain industry as a whole.
The thought behind this is that the more the blockchain and cryptocurrency sector grows, the more the value of the leading digital assets will increase. Hence, by buying digital currencies and digital tokens of promising blockchain startups, you can build a broad portfolio that is linked to the success of crypto and, thus, by extension also to the success of Coinbase.
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