Can Coinbase shares surge 50% higher after Facebook deal?

Shares in Coinbase jumped on the announcement that Facebook will store funds from its new and upcoming digital wallet with the cryptocurrency exchange. It’s a big boost for Coinbase who shares collapsed 50% from its post-IPO price high, to then rally back up 50% to current levels.  

Coinbase will act as the custody partner to Facebook’s new digital wallet called Novi. This will allow users to convert local currencies into cryptocurrency from its own mobile app that will have seamless integration with other Facebook products.  

The rollout will start with a pilot project in the U.S. and Guatemala using the stablecoin Pax Dollar. It’s been a good quarter for Coinbase who also recently announced a surge in dealing volumes and a 1,100% growth in net revenues from last year.  

Source: Admirals MetaTrader 5, COIN.US, Daily - Data range: from 1 Jun 2021 to 19 Oct 2021, performed on 19 Oct 2021 at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results. Last five-year results not available.  

Since the Coinbase IPO on 14 April 2021, the highest price level the stock reached was around ~$429.54. Since then the price collapsed to a record low of ~$208.00 on 17 May.  

However, the stock price seems to have stabilised and is now up nearly 50% higher. If the tie-up with Facebook can lift investor sentiment, then investors may look to the next major resistance level for the stock which is the record high around ~$429.54 - a near 50% move higher from current levels.  

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