Coinbase Huge Rise in 2023 Crypto Bull Run (NASDAQ:COIN)

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Leon Neal

Coinbase (NASDAQ:NASDAQ: CURRENCY) is my favorite crypto stock because I use Coinbase to buy Bitcoin with every paycheck and understand how important the company is to the entire crypto ecosystem in America.

However, 2022 has been difficult year for cryptocurrencies and a lot of negative press has caused many crypto newbies to lose their money and panic sell.

Several crypto brokers and trading platforms such as Traveler (OTCPK:VYGVQ) filed for bankruptcy, leading many investors to label the crypto a “scam.”

I made the mistake of placing a buy recommendation on Voyager earlier this year not knowing the company was struggling.

I also held Cardano (ADA-USD) on the Voyager platform and lost all ADA as a result.

The truth is that these high-profile failures benefit Coinbase in the long run, as crypto holders will be looking for a trusted brand name instead of attractive high returns in the future.

The good news is BlackRock selected Coinbase to provide crypto trading services to its clients. This is a big win for Coinbase and the entire crypto industry, as BlackRock (BLK) is the largest asset management company in the world with over $10 trillion in assets under management. .

In this article, I will provide my updated analysis of Coinbase shares and explain why I think 2023 will be an important year for the company.

Buy paid fear

I posted my previous Coinbase article in May 2022 when the crypto markets were crashing and told my followers to buy the dip. COIN stock was trading near $48, so you’ve had a nice 68% gain since then if you bought fear.

May 2022 Coinbase Article

May 2022 Coinbase Article (Looking for Alpha)

We have seen the bottom of the crypto markets and I don’t think things will get any worse than they have been over the summer.

Anything can happen, but I don’t expect COIN shares to go back below $50 unless the company does a stock split.

Coinbase’s Second Quarter of 2022 Was a Disaster

Coinbase struggled in the second quarter, as did the broader crypto market with underperforming numbers across the board.

Coinbase Q2 2022 Results

Coinbase Q2 2022 Results (Coinbase)

Q2 2022 revenue was $808 million (down 64% year over year) and the company posted a loss of $1.1 billion (-$4.98 per share).

In general, Coinbase will perform well during crypto bull markets and lose money during crypto bear markets. The company derives most of its revenue from trading fees and needs a lot of buying activity to make money.

There is no reason to panic right now and empty Coinbase stock without any thought. Crypto markets move in 4-year cycles and that’s completely normal.

COIN stock is trading at a much better price-to-sell ratio of 3 and its price-to-book ratio is also around 3.

Coinbase has $6.15 billion in cash on its balance sheet and has taken several steps to cut costs and save money, such as dismiss 18% of its employees and close your affiliate program.

Long-term debt stands at $3.62 billion, giving the company ample breathing room in case the crypto winter lasts much longer.

As of June 2022, Coinbase had $427.8 million in crypto assets. Coinbase owns 8,633 Bitcoins and 123,021 Ethereum. Check out these Coinbase Statistics for more information on the company’s latest quarter.

Coinbase One is a game changer

While waiting for the crypto markets to recover, I’m extremely curious about Coinbase’s monthly subscription program called Coinbase One.

Coinbase One

Coinbase One (Coinbase)

Coinbase One offers subscribers several benefits, including:

  • $0 crypto trading fee
  • Dedicated 24/7 live phone support
  • $1 million account protection
  • Pre-filled Form 894 for filing your taxes

Coinbase One charges a monthly fee of $29.99 as the company tries to diversify its revenue stream away from one-time trading fees.

Competitors such as Robinhood (HOOD) offer $0 crypto transactions and offer a crypto wallet without any fees. It makes sense that Coinbase should offer something special to give its users a reason to keep spending money on transactions.

Barry McCarthy, CEO of Peloton (PTON) believes the subscription model business will save Peloton and we may see more companies like Coinbase rely on subscription revenue in the future.

Coinbase One is a must-have for crypto investors holding large sums of money on the platform. You get up to $1 million in account protection if something goes wrong.

For just $29.99, I believe Coinbase One will become extremely popular and generate a whole new revenue stream that will help the company maintain strong cash flow during crypto bear markets.

The Crypto Bull Run 2023 is almost here

Crypto rewards patience and I silently wait for my crypto stocks to rebound.

The good news is that all signs point to a crypto bull run in 2023 that could send Bitcoin and other cryptocurrencies soaring to the moon again.

Crypto analyst Miles Deutscher job an interesting tweet that has been tracking the price of Bitcoin since 2011.

According to his tweet, Bitcoin follows a simple 3-year bull run followed by a 1-year bear market. This corresponds to the 4-year Bitcoin halving cycle, where the number of mineable Bitcoin is halved every 4 years.

The next Bitcoin halving will take place around April 2024 and I think many crypto bulls will be buying Bitcoin and other cryptos in anticipation of the halving event.

2024 Bitcoin Halving Countdown

2024 Bitcoin Halving Countdown (CoinWarz)

This is extremely bullish as Coinbase makes a lot of money during crypto bull runs.

If you bought COIN shares in last year’s IPO, then you’ve lost 75% since April 2022.

Chart
PIECE OF MONEY given by Y-Charts

2023 could be the year COIN stock recoups much of its losses as Bitcoin price and Coinbase stock are positively correlated.

Risk factors

Coinbase has a wide gap with its 103 million verified users, but there are so many things that could go wrong.

  • A major Coinbase hack would destroy the company’s reputation and cause users to withdraw their crypto from Coinbase’s platform.
  • The crypto market never recovers and Crypto just becomes another fad like Beanie Babies or Pokemon.
  • Legacy banks and investment firms offer Bitcoin trading accounts and steal business from Coinbase.
  • Other future lawsuits affect Coinbase and help destroy its reputation.
  • Coinbase offers more high-yield crypto products in the future and risks going out of business if its hedge fund clients fail to repay their investment loans.

Conclusion

Coinbase isn’t perfect but I trust them more than any other crypto exchange in America. The company has never offered high crypto interest yields, so it avoided the whole mess of Voyager/Celsius 3 Arrows Capital bankruptcy.

Coinbase turned 10 this year and remains an extremely simple and secure way to buy and sell cryptocurrencies.

If you don’t want to worry about owning cryptocurrency, I think owning Coinbase stock is the next best option.



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