Coinbase - The Best Performing Stock of 2023
๐๐๐2023 has been a challenging year from high inflation, rising interest rates, tight labour markets and geopolitical tensions. Yet Coinbase not only survived but thrive!
has had an incredible year. It is currently up a massive 340% year todate. From a 52 week low of USD 31.55, it has jumped to a high of USD 147.90 on Friday's closing.
With the much anticipated approval of Spot Bitcoin ETF in January by the SEC, investors have been in a trading frenzy over Bitcoin and all things connected with cryptocurrencies. Bitcoin is up a huge 153% year todate but Coinbase is up even more at 340% year todate. Bitcoin has hit over USD 43000 just yesterday. The fortunes of Bitcoin and Coinbase are intertwined. Coinbase is the largest US Cryptocurrency Exchange and one of the biggest in the world.
Coinbase has also partnered with Blackrock to offer institutional investors access to Bitcoin and in the forthcoming Spot Bitcoin ETF too.
In April 2024, Bitcoin halving cycle will happen. What this means is that the number of Bitcoin that can be mined and given as rewards will be reduced by 50%. This will increase the scarcity of Bitcoin.
In the past few years, Coinbase has been looking to shield itself from fluctuations in Cryptocurrency prices and diversify its revenue base. Coinbase has been steadily increasing its Subscription and Services revenue from just USD 45 million in 2020 to USD 792 million in 2023.
Subscription and Services revenue consists of Blockchain Rewards, Staking, Custodial Fee revenue and interest income.
In Q3 2023, Coinbase topped analyst estimates on earnings and revenue while falling short in total trading volume expectations. Coinbase reported a 3rd quarter adjusted loss of 0.01 cent per share compared to FactSet estimate for a loss of 55 cents per share. This marks the 3rd consecutive earnings beat for Coinbase. Total revenue was USD 674.1 million, beating expectations of USD 650.9 million.
Trading volume in Q3 was just USD 76 billion versus expectations of USD 80.1 billion, down from USD 92 billion in previous quarter. Third quarter revenue was USD 288.6 million, falling 12% from USD 327 million in the previous quarter.
Coinbase attributed this to declining overall crypto markets and volatility. However Coinbase has a strong balance sheet with over USD 5.5 billion in USD resources.
Coinbase also obtained new licences that enable the company to access new markets and deliver new products. One of the new markets was Singapore.
Wall Street Analysts are bullish on Coinbase as it has first mover advantage and will further benefit from the current tailwind in the Cryptocurrency markets and imminent approval of Spot Bitcoin ETF.
The All Time High share price of Coinbase was USD 357.39 on November 9 2021. While past history is not a indication of future prices, I believe Coinbase may well hit USD 200 within the next 3 months.
Coinbase's mission is "to bring over 1 billion people into crypto" and so far it is well on its way to success! Given that cryptocurrencies are still at an early stage of development, there is enormous potential ahead for Coinbase as it embarks on an exciting future with lots of opportunities to grow exponentially.
It is no wonder that Coinbase is the best performing stock in 2023 and has rewarded its patient investors with explosive compound growth.
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Another upward trend after the crypto ETF passes
If you own Coinbase Stock wouldn't you want to own the Company that powers it.
Coinbase was once over $400 on IPO day!
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