"Should I Buy Coinbase?" We Asked A Top Crypto Expert

DZ (A): You're talking about what's known as CBDCs, or central bank digital currencies. I do see them as inevitable, but don't see them posing a risk to crypto in general – or to a business like Coinbase. I'm pretty sure central banks will design their digital currencies to track everything you do with your money. When Bitcoin was invented, it was designed to be decentralized and anonymous – specifically to avoid the prying eyes of the government. If anything, CBDCs will make cryptocurrencies more desirable.

WPIII (Q): So let's go back to my earlier question about the outlook for Bitcoin and other cryptocurrencies…

If that does play a role here… what's your latest "call" for Bitcoin?

You're great at this, Dave.

Talk about prices… predictions… ripple effects… impact.

DZ (A): Thanks, Bill.

One thing that's become clear over the past five years is that, as Bitcoin goes, so goes the rest of the crypto markets. And as the crypto markets go, so goes Coinbase's share price.

They're all linked together.

Having said that, I still see a lot of upside for Bitcoin in the near to mid term. I have moved up my prediction of $100,000 to hit by Labor Day.

WPIII (Q): Okay, Dave… the question at hand.

Would you buy Coinbase here?

If so, why?

If not, why not?

At what price… when… how would you buy this stock?

DZ (A): [Laughs… and nods] That is a good question. To be honest, I'm not a buyer of Coinbase here. The price action figures to be pretty crazy for a while. And I think it may be overvalued, but I can't even be sure about that because we just don't have enough data yet. I think the stock needs to settle a bit.

I don't necessarily have a price where I would call Coinbase a "Buy." But I will say that, if we do get a prolonged crypto winter, Coinbase will fall to the point where it starts looking very attractive. A couple more years down the road, when the crypto market goes back into bull mode, Coinbase stock will really take off.

Now I know some investors are attracted to Coinbase because they want exposure to cryptocurrencies. That's not a factor for me, as I already own a lot of cryptos directly.

But those folks may want to borrow a page out of your playbook, Bill.

WPIII (Q): The "Accumulate" strategy.

DZ (A): That's right. The strategy you talk about – and employ – with lots of stocks you talk about here.

Now, again, I see risks – the risks and uncertainty I've outlined here – risks and uncertainty that argue against going "all in" and going in "big" with Coinbase right now.

The alternative is to maybe buy a very small "foundational" stake here. Then look to add to that stake only on pullbacks… and on the bigger pullbacks at that.

But do that with great caution and care.

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