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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-base
by lacker 6y ago
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.
- endisneigh 6y agoI 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.
- berberous 6y agoIf crypto crashes or stabilized, Coinbase is still (for the time being) making monster spreads/fees on trades. A basket of the top coins also includes garbage like ADA and XRP. Crypto is not the place to market weight IMO given the frequent disconnect between price and quality of projects.
- endisneigh 6y agowhy wouldn't Coinbase crash if crypto crashed? crypto cashing would mean decline in crypto in general, no?
- jobigoud 6y agoCrypto crashing means a lot of people selling, hence a lot of trades, hence lots of money for CB.
- endisneigh 6y agoYes but it also means lowered future demand for crypto, which means less money for CB in the future, which means a lowered stock price.
- weird-eye-issue 6y agoIt isn't just about "price increasing faster". That isn't how you look at investing.
- endisneigh 6y agoHow do you look at it then?
- weird-eye-issue 6y agoIt is about risk adjusted returns.