Chicago, IL – December 4, 2024 – Today, Zacks Investment Ideas features iShares Bitcoin Trust ETF IBIT, Fidelity Wise Origin Bitcoin ETF FBTC, ARK 21 Shares Bitcoin ETF ARKB, MicroStrategy MSTR, and Coinbase Global COIN.
Zacks Rank #2 (Buy) Stock Coinbase Global operates the largest cryptocurrency exchange in the United States by trading volume. Coinbase is benefiting from global cryptocurrency adoption by offering a wide range of proprietary cryptocurrency products.
After COIN debuted in the “crypto winter” of 2021, the stock price fell amid falling crypto prices and the demise of its biggest competitor FTX. However, the company's stock price and fundamentals are rapidly recovering amid global adoption of cryptocurrencies, innovation, and a strong balance sheet. Here are some reasons why Coinbase's momentum is here to stay.
A significant hurdle in the cryptocurrency industry lies in the seamless conversion of fiat currencies to cryptocurrencies. On Monday, Coinbase announced efforts to make the process smoother. Coinbase's website states, “Today, we are pleased to announce that we are introducing Apple Pay to all fiat-to-crypto purchases through Coinbase Onramp, the easiest tool to incorporate Onramp into your existing products. ” he wrote.
Earlier this year, Coinbase also announced a strategic partnership with payments giant Stripe to “expand global adoption.” The Stripe-Apple deal represents a landmark moment for Coinbase, which appears to be the de facto choice for traditional payments giants. These transactions earned COIN a voting position that further favors global cryptocurrency adoption.
Coinbase has probably benefited more from President Donald Trump's victory than any other stock on Wall Street. During his campaign, President-elect Trump announced plans to fire Gary Gensler, head of the stock exchange, on day one. Gensler has become COIN's biggest enemy because of his failure to provide regulatory clarity to Coinbase on whether certain assets should be treated as securities or commodities.
President Trump has yet to set foot in the White House, but investors are discounting the future and are furiously bidding for altcoins. For example, the cryptocurrency Ripple, which has been embroiled in legal battles for years, has risen more than 300% since the election.
Strong price movements and a surge in volume are major drivers for Coinbase, which charges high fees ranging from 0.5% to 4.5% depending on the coin.
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So far, the performance and inflows of Bitcoin ETFs such as iShares Bitcoin Trust ETF, Fidelity Wise Origin Bitcoin ETF, and ARK 21Shares Bitcoin ETF have been unprecedented. The company stands to benefit as Coinbase acts as a custodian servicer for most crypto ETFs. Meanwhile, COIN could benefit further as public companies look to mirror MicroStrategy's hugely successful “Bitcoin Standard.”
After breaking out on Election Day, COIN stock has been reeling in a picture-perfect bull flag pattern. Meanwhile, aggressive and long-term call option buyers continue to enter the market, lending confidence to the current chart pattern.
Despite Coinbase's “wild west” reputation in the cryptocurrency industry, it boasts a stellar balance sheet and growing cash reserves.
Coinbase is a true market leader in the cryptocurrency industry. This stock should benefit from global cryptocurrency adoption, strategic partnerships, and a strong balance sheet.
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