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Besides the investors who made early moves, no person or company has benefited as much from the crypto boom as Coinbase Global (NASDAQ:COIN). The company attracted users, financials soared and it expanded its market share. Coinbase was in the right place at the right time and it has made the most of it. As a result, COIN stock looks attractive with its massive growth potential.
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The stock has gone down from $342 to about $200 in the past year, but it has a solid chance of hitting the $300s again. Several catalysts are working in favor of COIN stock, and this dip is a good chance to buy. With that in mind, let’s see what is working for the company.
Crypto Industry Is in Its Early Stages
The crypto industry has gained massive popularity over the past five years, but there was a time when investors only knew about Bitcoin (BTC-USD). As years passed by, new crypto assets came to the limelight and everyone rushed to make the most of the crypto boom.
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The industry is still in its early stages, and this means there is ample growth potential. Bitcoin has soared more than 4,200% and hundreds of other crypto assets are going up even more.
What this means for Coinbase is huge growth potential. The platform has a first-mover advantage and a long way to go. Many people are still not aware of cryptocurrency as an investment, and even if they are, many haven’t made their first buy yet.
This means there is a huge possibility of attracting new users over the next five years. The company already has 89 million verified users, but this is not enough.
As Coinbase continues to add new assets to the platform and if it offers low fees, consumers are going to stick to the platform. There is rising competition in the industry, but Coinbase has already established itself as a solid player. If it continues to add new assets while offering strong security, consumers will stick with it.
Solid Numbers
Coinbase has reported impressive fourth-quarter results with a revenue of $2.5 billion, up from $585 million in the same quarter previous year. Whenever users make a transaction, the company takes a cut. This means it is less affected by market volatility and more dependent on transaction volume.
The company reported $2.2 billion in transaction fees in the fourth quarter. Hence, the movement of Bitcoin or Ethereum (ETH-USD) alone will not affect its fundamentals.
The majority of its revenue comes from transaction fees. However, Coinbase will have to work around eliminating these fees or maybe decreasing them to compete with players in the industry who offer free trading.