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Coinbase’s record direct public offering (DPO), favorable equity markets, and increased cashflow into the marketplace add up to a good environment for investors, according to Eva Ados, COO and Chief Investment Strategist of ERShares, in an interview with Yahoo! Finance.
Coinbase (Nasdaq: COIN) was the biggest DPO in history; within the first 10 minutes of trading on Wednesday, April 14th, it had reached $105 billion of market capitalization.
“To put that in perspective, that’s 4 times the Nasdaq and 1.5 times the NYSE,” said Ados.
It is important to remember, added Ados, that Coinbase is also an exchange, which means it can trade 50 cryptocurrencies at a time.
It’s “a great entrepreneurial growth story” that shows potential for the future for crypto assets and exchanges, she added.
Optimism Extending to the Broader Market
Elsewhere in the market, Ados believes that Fed support, good earnings announcements, low unemployment numbers, persistently low interest rates, and vaccination rollouts will all lead to a strong economic comeback, especially in the tech sector.
The “least risky category” in tech, said Ados, are the FAANGs, which are showing 10% growth year-to-date. Other opportunities lie in “hyper-growth” companies with strong earnings, such as Square (NYSE:SQ) and Roku (NASDAQ: ROKU), and even hyper-growth companies with no or negative earnings, such as Cloudflare (NYSE:NET). One-third of the U.S. tech sector is compromised of hyper-growth companies with no earnings, said Ados.
She also stated that bond rates may have overshot and will continue to drop as they course-correct, with Fed support. Bond market yields, she noted, are coming down; the yield on 10-year Treasury notes was down to 1.58%, from 1.64% the previous week. “We believe it’s not a good time to be in the fixed income space,” said Ados, adding that flows are moving toward equity markets.
ERShares isn’t currently concerned with inflation, with Ados stating that they may pay closer attention as the year draws to a close. But with support from the Fed and the recent round of stimulus payments helping to bolster the economy, there is increased cash flow to the markets. Record numbers of retail accounts with Robinhood and Schwab have been opened as Millennials flock to tech stocks—especially the “growth stories that Millennials love”—all adding more money to the marketplace, she added.
There’s nothing but “blue skies ahead. It’s a great time to be an investor,” concluded Ados.
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