{"id":121057,"date":"2021-04-13T21:43:52","date_gmt":"2021-04-13T21:43:52","guid":{"rendered":"https:\/\/precoinnews.com\/?p=121057"},"modified":"2021-04-13T21:43:52","modified_gmt":"2021-04-13T21:43:52","slug":"why-one-trader-is-cautious-on-the-coinbase-debut-as-bitcoin-hits-all-time-high","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/why-one-trader-is-cautious-on-the-coinbase-debut-as-bitcoin-hits-all-time-high\/","title":{"rendered":"Why one trader is 'cautious' on the Coinbase debut as bitcoin hits all-time high"},"content":{"rendered":"
Bitcoin is blasting higher ahead of Coinbase's public market debut.<\/p>\n
The cryptocurrency rose nearly 5% to a fresh all-time high above $63,000 on Tuesday ahead of Coinbase's direct listing, which is scheduled for Wednesday and could be valued at as much as $100 billion.<\/p>\n
Bitcoin is up a stunning 118% year to date, according to Coin Metrics.<\/p>\n
When it comes to Coinbase, investors should tread carefully, TradingAnalysis.com founder Todd Gordon told CNBC's "Trading Nation" on Tuesday.<\/p>\n
"I'm a little cautious on this IPO," he said.<\/p>\n
Because the exchange's bid-ask spreads \u2014 the difference between what buyers are willing to pay for a given asset and what sellers are willing to accept \u2014 are so wide, going public could make its lofty valuation a bit of a stretch, he said.<\/p>\n
"Those spreads will come in just like stocks," said Gordon, who owns bitcoin. "That's going to help initially, but I think with a valuation of [$]100 billion coming in, it's going to be hard to justify when consumers realize that they want to compress spreads [and] make it more competitive."<\/p>\n
Bitcoin also has a few fundamental obstacles ahead of it, Gordon said.<\/p>\n
"The adoption following that first wave of institutional onboarding has slowed. [It's] getting a lot of negative talk from central bank officials," he said. "India's about to start banning trading, owning and mining crypto, so, that's a problem, and also, NFTs are taking some of the capital flows away from bitcoin, but yet, the price is pushing higher."<\/p>\n
However, that push could continue for some time before the cryptocurrency tops out, he said.<\/p>\n