Urupong/iStock via Getty Images
Editor’s note: Seeking Alpha is proud to welcome Cryptonomics as a new contributor. It’s easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Active contributors also get free access to SA Premium. Click here to find out more »
Investment Thesis
The market is expecting a repeat of the lackluster Q3’21 for Q4’21 of Coinbase (COIN) and we project that Q4’21 will be the best quarter of the year beating Q2’21 by ~25% and Q3 by ~115%. The upcoming NFT Platform will add to the flywheel effect and accelerate revenue growth in 2022.
By using a portion of its vast profits to reinvest into Coinbase Ventures, COIN is positioning itself to be a one-stop-shop and on/off ramp for anything and everything crypto and web 3.0 – otherwise known as a Super App. Coinbase Banking has started offering interest-bearing accounts on crypto and Borrow/Lend services which earn Coinbase high interest revenue on safe over-collateralized loans.
The long-awaited institutional horde is finally here. Coinbase has over 7,000 institutional customers, including hedge funds, financial institutions and corporations. Coinbase also has an impressive list of the top 10 institutional investors such as ARK Invest.
Rain or shine, every minute of every day Coinbase makes money, because it is a 24/7 market that doesn’t close or take breaks, and every single transaction adds to their bottom line.
Remember: “To make money in stocks you must have the vision to see them, the courage to buy them and the patience to hold them. Patience is the rarest of the three.” – Thomas Phelps
Backdrop
Total crypto market capitalization at the end of Q4’21 was about $2.2 trillion, up from about $800 billion at the end of 2020. According to the World Bank and crypto.com, the number of crypto users globally has 2X’ed in the first half of 2021 to over 200 million – and the rate of user growth is accelerating. The crypto adoption curve is mirroring that of Internet adoption over the first decade, beginning in the late 1990s. Looking at the growth path we can expect the number of crypto users to hit ~ 1 Billion in ~ 2-3 years.
Source: Coinbase-Q321-Shareholder-Letter
In expectation of the 1 Billion users, Coinbase is investing heavily towards the future through their growth flywheel by: growing user base, adding breadth and depth of assets, and launching innovative products and services like NFTs and lending.
What Story Are Coinbase’s Three Earnings Reports Telling Us?
In my experience, when it comes to newly IPO’ed companies, it is best practice to start a small position after the second …….
Source: https://seekingalpha.com/article/4478780-coinbase-big-nft-tailwind-market-missing
