Coinbase IPO invest in cryptocurrency

S&P 500 and Dow Jones Sets Record

The Dow Jones Industrial Average rose 297.03 points, or 0.89 percent, to 33,800.6, the S&P 500 gained 31.63 points, or 0.77 percent, to 4,128.8

The rise was partly due to growth stocks finding their footing (after being outperformed by value stocks for a good part of the year). Investors received encouragement to invest in growth stocks as a pullback in U.S. Treasury yield was witnessed.

Another contributing factor has been the growth certain sectors experienced in the market – Consumer discretionary (+4.2%), Tech (+4.7%), Financials (+1.9%) and industrial stocks (+1.8%).

Top Stories This Week

Time to rejoice for bitcoin enthusiasts as Coinbase goes public

Leading cryptocurrency exchange in the U.S., announced last week that its direct listing on NASDAQ had been approved of by the Securities and Exchange Commission. The company would start to trade its shares on April 14, using the ticker symbol COIN.

Though the company has listed 114,850,769 shares of stocks, how many will be available for sale is not yet known. The company also chose to opt for a DPO (Direct Public Offering) and not an IPO which in itself offers a bundle of advantages to early investors.

Investor’s perspective

Preliminary results for Q1, 2021 released by Coinbase also make a compelling case on behalf of the company. A nine-fold increase in the revenue, from $190.6 million in the prior quarter, to $1.8 billion, was observed. Net income of the company is expected to be in the range of $730 million to $800 million, which will represent an increase of nearly 2,300% at the midpoint of its range. With a verified user base of 56 million and more than 6 million monthly transacting users, Coinbase is most likely to be the biggest blockbuster of 2021.

Declaration of War or A Brilliant Taxation Strategy?

For long now, nations across the globe have been trying every trick in the book to attract multinational corporations. The Biden government is out to change this now. US Treasury Secretary Janet Yellen in her speech at the recently conducted meeting of Chicago Council of Global Affairs urged the advanced nations to adopt a minimum global corporate income tax.

The Biden administration has proposed an increase in the US corporate tax rate – 28% to the present day 21%. The move is being deemed by many experts as being radical in nature considering the fact that the Trump administration had brought it down to 21% from 35% through a 2107 legislation. 

Investor’s perspective

This move is touted to impact large multinational corporations such as Facebook, Alphabet and Apple, among others as they are deemed to be the biggest beneficiaries of the currently low tax rates. The European Commission and the IMF have offered their conditional backing to the Biden administration on this.

Will the bull keep running wild or is the bear coming for the chickens?

The Wall Street’s ‘fear gauge’ (CBOE Volatility Index), is at an all time low (17) since Feb, 2020. A few experts in the market though believe that this will not remain this way for long. Rising inflation could be one cause for this as we quote the Dallas Federal Reserve President Robert Kaplan who said that inflation could rise “well in excess of 2.5%,” over the summer, beating the Fed’s 2% target.

Investor’s perspective

The faith stemming from the record setting highs, the US markets witnessed over the past few quarters, could well be put to test by the emerging new COVID strains not only in the US but across the globe.

Other Top Stories:

Earnings Report: The giants of the banking sector set to release their earnings report.

Inflation Trends: Investors brace for key inflation data and company earnings.

Robotic Deliveryboys?: Domino’s to launch Robotic delivery services in Houston.

New Competition: Harley Davidson to make electric motorcycles.

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