Analyst Sees Potential in Coinbase Despite Slumping Shares

Despite Coinbase shares dropping amid market volatility, analyst Will Clemente believes the company revenue potential suggests it’s undervalued.

Amidst a recent downturn in Coinbase (COIN) shares, crypto analyst Will Clemente offers a contrasting perspective, likening the investment opportunity to that of Tesla during its early stages. Over the past five days, COIN shares have tumbled by 16%, reflecting broader market fluctuations. However, Clemente contends that traditional investors may be overlooking Coinbase’s true value, particularly its transformation into a comprehensive crypto platform.

Despite its origins as a cryptocurrency exchange, Coinbase has evolved significantly, expanding its offerings to encompass various crypto services. Clemente highlights Base, Coinbase’s Ethereum layer-2 network, which boasts a total value locked (TVL) of $5.35 billion and facilitates approximately 30.81 transactions per second. He emphasizes Base’s revenue potential, citing $30 million in top-line revenue generated over the last month solely from sequencer fees. This figure, Clemente suggests, could annualize to $360 million, a substantial revenue stream that many investors may be disregarding.

While COIN’s current trading price sits at $218.08, marking a 16% decline over the past five days, Clemente remains optimistic about its future prospects. He attributes the market’s tepid response to Coinbase’s evolving business model, which traditional investors may not fully grasp. As COIN prepares to release its first-quarter earnings report for 2024, Clemente anticipates heightened investor interest in the company’s performance and revenue streams.

Additionally, recent geopolitical tensions have contributed to market uncertainty, with reports of explosions at Isfahan airport in Iran further dampening sentiment. Against this backdrop, COIN’s shares face additional pressure, with the S&P 500 down by 3.12% over the past five days and Bitcoin experiencing a 4.67% decline. Despite these challenges, Clemente’s bullish outlook on Coinbase’s revenue potential underscores a contrasting narrative amidst market volatility.

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