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In 2021, crypto’s most important company, Coinbase, went public at a $100 billion valuation, with a trading price around $430.
A few months after its IPO, the crypto market came crashing down and so did the $COIN stock.
Despite launching at a valuation higher than Shopify’s, Airbnb’s, and Paypal’s current respective market caps, $COIN tumbled as low as ~$35, to a sub $10 billion market cap.
This tremendous dump and heavy correlation to the crypto market has left many investors wondering: Is $COIN actually a good investment?
I’ve always been certain that it was a good investment. I even shared this message, telling PRO subscribers I was buying $COIN back in July, when it traded around $60.
It’s funny how I predicted $ETH to outperform $COIN, yet $ETH is up only 70% YTD and Coinbase is up 250% YTD. 🤯
Can't get 'em all right I guess. 🤷
But in all seriousness, I wish I would’ve told you more. I wish I sent you this report back then in July because $COIN has been on a complete tear since. Sorry, I didn’t.
$COIN is up 100% in the last 6 months and 250% since the beginning of the year.
It has completely outperformed most other stocks and even most of crypto, including $BTC. Insane.
But despite its massive surge, there’s still a long way to go until all-time highs. $COIN needs to pump another 233% to get there.
But will it get there? I think so…
And will it continue to outperform $ETH? Probably not…
So why am I even writing this report? Why analyze a stock when buying $ETH is simply a better idea?
Here’s why.
Firstly, because $COIN is a stock, I can hold it in my Tax-Free Savings Account (TFSA) and pay 0 taxes on the gains that $COIN generates for me.
Secondly, I see $COIN acting as an ETF of the crypto market. When the markets are bullish, so is $COIN, and because I’m confident we’re entering a bull market, I see $COIN as a very good investment, especially for institutional investors who want to get exposure but can’t buy the tokens because of regulation.
So let’s dive deep into the fascinating business of Coinbase and see if this thing is a good future investment.
P.S. - I know some of you think you’ve missed the train because $COIN surged so much lately, but stick around until the end of this report. I’m sharing some technical analysis predicting what’s likely to happen next with its price. Hint: it’s kinda bullish. 🐂
But first, I want to start with the argument against Coinbase. What are the skeptics saying about $COIN and do they have a point?
The Argument Against Coinbase 😠
When Coinbase went public, many tradfi investors argued that it’s not a good investment because of how dependent Coinbase was on the performance of the crypto market.
In 2021 (bull market), Coinbase generated a profit of $3.6 billion, while during the bear market of 2022, it lost $2.6 billion.
The reason for this is due to the nature of Coinbase’s business. They mainly generate revenues from trading fees, taking a cut from every swap that occurs on their exchange.
When they IPO’d back in 2021, they heavily relied on these fees, making up about 88% of Coinbase's ~$7.4 billion in revenue.
So when Coinbase went public, many were wondering if they could diversify their revenues to not depend solely on trading fees. If that were to happen, Coinbase would become a great investment.
Well, in 2022, the amount representing transaction fees from total revenues decreased to 74% ($2.35 billion from $3.2 billion yearly revenue).
And today, according to Coinbase’s latest (Q3) earnings report, only 42.8% of their total revenues come from transaction fees.
The reason for this decrease in ratio was led by the creation of 5 different (soon to be 7) income streams, which makes $COIN much more appealing than when it first IPO’d. Despite this, its price is down by 66% from those levels.
So by reading this report, you’re very early.
Let me break down all of Coinbase’s revenue streams for you and let’s see just why $COIN is such a good business.
Income Stream 1 – Platform Fees
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