Coinbase: Making the Right Moves to Drive Long-Term Growth

Fibo Quantum

Bitcoin’s price currently sits only a few percent below its all-time high amid hopes a BTC futures ETF is about to get the SEC’s approval. It offers more validation for the crypto space, as the once digital wild west continues its forward march to mainstream adoption.

The numbers perfectly illustrate the progress being made. Cryptocurrencies’ total market cap has grown to $2.5 trillion this year, an astounding leap from the $1.5 billion it commanded only 8 years ago.

This is despite what Oppenheimer’s Owen Lau calls the US’ lack of a “unified approach to regulate digital assets,” with the country behind other regions and countries, such the EU, UK, Singapore and Japan in providing regulatory clarity for the crypto space.

With this in mind, last week Coinbase (COIN) published a Digital Asset Policy Proposal, laying out its thoughts for a new regulatory framework for the industry. The ideas consist of four key areas: 1) a distinct framework for digital assets; 2) the appointment of one regulator and a self-regulatory organization; 3) investors’ safety; and 4) interoperability and fair competition.

Congress and regulators are unlikely to be too keen on the first two, says Lau, who thinks they will be “more receptive” to 3 and 4. “While COIN doesn’t want to be the gatekeeper,” noted the 5-star analyst, “It has to be given its industry expertise and resources. We believe this proposal can facilitate more sensible regulatory conversation to foster innovation and job creation.”

The US might be falling behind its peers where the approach to crypto is concerned, but so has Coinbase in a segment which has generated an enormous amount of buzz – and revenue – this year. The leading exchange has yet to get in on the lucrative non-fungible token (NFT) craze but has now announced its intention to do so; the company said an NFT marketplace is coming soon. Coinbase already boasts a waiting list over 1.35 million, far higher than the 300,000 users counted by the world’s current largest NFT marketplace – OpenSea.

“Overall,” Lau summed up, “We believe COIN’s proposed regulatory framework is a net positive to the development of sensible regulatory framework, and COIN NFT marketplace will be a meaningful revenue driver longer term.”

So, down to the nitty gritty, what does it all mean for investors? Lau rates COIN an Outperform (i.e. Buy) along with a $444 price target. This figure implies ~51% upside from current levels. (To watch Lau’s track record, click here)

The rest of the Street has a more modest target; at $340.73, the figure could deliver returns of 16% over the one-year timeframe. Currently, the analyst consensus rates this stock a Moderate Buy, based on 12 Buys vs. 3 Holds and 2 Sells. (See Coinbase stock analysis on TipRanks)

To find good ideas for crypto stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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