Shares of this top crypto enterprise have been on a phenomenal run.
You'd struggle to find a better performing stock in recent times than Coinbase (COIN -5.03%). Shares of the digital-asset brokerage and exchange have skyrocketed 626% since the start of 2023, as they benefit from renewed interest in Bitcoin and the equities market.
The momentum for Coinbase has carried over into 2024, as it's up almost 50% just this year (as of April 8). This top cryptocurrency stock just exploded. Is it time for you to buy shares?
Favorable trends
Coinbase's impressive stock price run-up has certainly been propelled by some very powerful trends that are working in its favor. Investors need to know about them.
The first driver has to be the bounce back of the overall cryptocurrency market. At the start of 2023, the industry's market cap hovered around $800 billion. As of this writing, it's at $2.7 trillion. After investors wrote off the industry in 2022, things have come roaring back in a dramatic fashion.
This year, I believe the approval of spot Bitcoin exchange-traded funds (ETFs) is also boosting optimism around the crypto industry. And given that Coinbase is a custodial-service provider to many of these investment products, it's a vote of confidence for shareholders.
I think another positive trend working on behalf of Coinbase is just how much the business has transitioned to a more sustainable model. In 2021, when the crypto market was last experiencing a surge, 93% of the company's net revenue came from transaction fees derived from facilitating trades on behalf of individuals and institutions. In 2023, another extremely positive year for the market, 52% of sales came from transactions.
The change is credited to expanded subscriptions and services. Management hopes this is just the beginning of a more predictable and stable business model.
One reason to buy the stock
It's hard to overstate just how fantastic Coinbase's gain has been. But if you've missed the massive rally, it's best not to have fear of missing out (FOMO). Instead, think about where the business and stock could be three, five, or even 10 years from now. Having this type of long-term mindset is crucial when investing in stocks.
With that being said, I believe Coinbase is a smart buy only for those investors who are bullish on cryptocurrencies in general. That's because this business can be viewed as a bet on the growth of the entire industry.
Coinbase drives crypto regulation forward, engaging in discussions with lawmakers about how to design adequate rules. The company has hundreds of millions of dollars in venture-style investments in private crypto-related enterprises, giving it direct exposure to their success. It's one of the largest and oldest brokerages and exchanges in the world. And it's attempting to usher in a new era in the industry, one focused on driving greater utility of cryptocurrencies. Therefore, it's reasonable to expect Coinbase's financials and stock price to do well if digital-asset prices also rise over time.
Coinbase shares are currently 28% off their all-time high, so bullish investors have the chance to buy at a sizable dip. I'm personally not a buyer of the stock because I don't know where the crypto industry will be a decade from now. There is simply too much uncertainty for my liking.
But for growth-minded investors who have the tolerance to add a little more risk to their portfolios, and who believe in the future of digital assets and blockchain technology, Coinbase might make for a good buying opportunity right now. Just make sure to maintain a very long-term mindset for things to play out. And be ready for the inevitable volatility along the way.
Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Coinbase Global. The Motley Fool has a disclosure policy.
FAQs
Those valuations seem reasonable relative to its long-term growth potential, but Coinbase's stock will still rise and fall with the broader cryptocurrency market. But if you're bullish on cryptocurrencies, Coinbase might still be a great stock to buy, hold, and forget about for a few decades.
Is Coinbase stock worth buying? ›
Fair Value Estimate for Coinbase Stock
With its 2-star rating, we believe Coinbase's stock is overvalued compared with our long-term fair value estimate of $130 per share, which translates to 32.8 times our 2024 earnings projection.
Is Coinbase a good investment in 2024? ›
Unsurprisingly, 2024 has also proved to be very, very good for the industry's flagship company, Coinbase, whose stock is up nearly 70% this year to around $265, and has attracted the acclaim of JPMorgan analysts.
What is the best crypto to buy on Motley Fool? ›
The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and PayPal. The Motley Fool recommends the following options: short June 2024 $67.50 calls on PayPal.
How much will Coinbase stock be worth in 5 years? ›
Coinbase stock price stood at $235.95
According to the latest long-term forecast, Coinbase price will hit $350 by the end of 2025 and then $400 by the middle of 2027. Coinbase will rise to $500 within the year of 2028, $600 in 2030, $700 in 2033 and $800 in 2035.
How high is Coinbase expected to go? ›
Stock Price Forecast
The 19 analysts with 12-month price forecasts for Coinbase stock have an average target of 221.79, with a low estimate of 80 and a high estimate of 325.
Where will Coinbase be in 10 years? ›
Assuming the number of users continues to grow at a compound annual growth rate of 30%, Coinbase's total user base would be more than 1.5 billion in 2034, roughly the same number of users on Instagram today. Unsurprisingly, as Coinbase's user base has grown, so has its revenue.
Which coin will boom in 2024? ›
Top 10 Cryptos in 2024
| Coin | Market Capitalization | Current Price |
|---|
| Ethereum (ETH) | $422 billion | $3515 |
| Binance Coin (BNB) | $87 billion | $595 |
| Solana (SOL) | $66 billion | $143 |
| Ripple (XRP) | $27 billion | $0.499 |
6 more rows6 days ago
Largest shareholders include Vanguard Group Inc, Fmr Llc, BlackRock Inc., Susquehanna International Group, Llp, Conrad N. Hilton Foundation, VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, Susquehanna International Group, Llp, ARKK - ARK Innovation ETF, Citadel Advisors Llc, and Paradigm Operations LP .
What are the 10 stocks The Motley Fool recommends? ›
See the 10 stocks »
Mark Roussin, CPA has positions in AbbVie, Alphabet, Coca-Cola, Microsoft, Prologis, and Visa. The Motley Fool has positions in and recommends Alphabet, Chevron, Home Depot, Microsoft, NextEra Energy, Prologis, and Visa.
Rollblock (RBLK) is becoming one of the most prominent altcoins. Thanks to its long-term growth potential, this stage 1 presale star has the potential to compete with huge coins such as Solana (SOL), Avalanche (AVAX) and Binance Coin (BNB). In fact, certain analysts peg this rookie as the next 1000x altcoin in 2024.
What is the ultimate portfolio Motley Fool? ›
The Ultimate Portfolio for 2022 is a model portfolio built from stocks recommended in Stock Advisor and Rule Breakers, and works as an example for how you can better manage your risk through diversification without sacrificing your return potential.
Is it safe to use Coinbase right now? ›
Because it is US-based, publicly-traded, and is on the cutting edge of crypto security solutions, Coinbase consistently ranks as the safest crypto exchange in the world. That's why it's trusted by more than 100 million crypto investors.
Is Coinbase going to go back up? ›
Since November 2023, the market cap for USD Coin is up about 36%, according to CoinMarketCap. This means that there are suddenly billions of extra dollars at work generating revenue for Coinbase. This could have a surprisingly positive effect on the company in 2024 if the current trend continues.
Should I keep money in Coinbase? ›
Coinbase has built its reputation as a trustworthy, reliable, and secure crypto exchange platform. It uses robust security measures to protect its users from losing their funds or data to hackers. To name a few, Coinbase stores more than 90% of its customers' funds in what's called cold storage.
What to invest in Coinbase right now? ›
Of all the assets on Coinbase, these 12 are the closest to TOP in market cap.
- Göztepe S.K. Fan Token.
- YAM V3.
- Integral.
- Fenerbahçe Token.
- Residual Token.
