CNBC’s Jim Cramer advised buying Coinbase shares at the right price when it opens for trading on Wednesday. He further said that he is impressed by the popular cryptocurrency exchange’s business model and leadership team. Investors must be disciplined not to chase the stock if it jumps out of the gate, since it will certainly trade volatile after listing directly on the Nasdaq, he added.
Coinbase Expected to Have a Bumpy Ride With Stock, Jim Cramer
“If you, like me, [are] a big believer in cryptocurrency…you’ll want to own Coinbase for the long-haul. What matters to me is that there’s a tremendous appetite for this new asset class and it’s not going away. You don’t have to be a believer in crypto the concept to believe in crypto investment,” Cramer said.
After praising the mainstream crypto exchange he also warned about many ups and downs in the near future. Coinbase, the year’s hottest stock, maybe a victim of bad timing soon, according to Cramer. The market’s enthusiasm for the newcomer could put pressure on other tech stocks, as some investors sell growth stocks to fund Coinbase.
“I think Coinbase is the real deal — the numbers are incredible — but I hate the timing. One of my biggest fears right now is that we have a growth stock glut, just too many of these things, especially in tech,” he said.
Cramer asserted that Coinbase is connected to the strong-performing Bitcoin. Bitcoin is the largest cryptocurrency today which hit $63,000, a new ATH on Tuesday. The exchange supports a wide range of cryptocurrencies like Ethereum and Litecoin. It also makes money on commissions.
Too High Demands Will Carry Stocks To Utmost Level
Carmer says that one of the main reasons why one should be concerned is if there is too much initial demand, then that may carry shares of Coinbase to extreme levels. And if that happens, a good buying opportunity could open up if early investors decide to dump shares and take profit, and this will induce a big sell-off.
“I say buy some tomorrow, ideally at less than $475, but I accept that some have to be bought. Then wait to buy more on weakness and get ready for the bumpiest ride of your financial life, a ride I expect to be lucrative over the long haul,” Cramer advised.