Cryptocurrencies have been on a meteoric rise, with the market worth surpassing $2.45 trillion in 2024, jumping nearly 50% in value. Despite this surge, there’s a compelling opportunity that goes beyond investing in individual cryptocurrencies: Coinbase Global (NASDAQ: COIN).
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A Brief History of Coinbase
Coinbase made headlines as the first crypto-native company to go public, marking a milestone in the legitimization of digital assets. However, after the euphoria of its IPO in 2021, the company faced challenges during the subsequent crypto winter. In 2022, Coinbase reported a significant loss of $2.6 billion, a stark contrast to its $3.6 billion profit in 2021.
Coinbase’s Resilience and Evolution
Despite the hardships, Coinbase emerged stronger, thanks to strategic changes in its business model and expansion efforts. One of the most notable shifts was diversifying its revenue streams beyond transaction fees. Previously, transaction fees accounted for 90% of its revenue, but today. They contribute less than half, showcasing its adaptability and resilience.
A Transformed Business Model
The Subscription and Services segment, which includes staking rewards and custodial fees, now plays a significant role in Coinbase’s revenue mix. Additionally, Coinbase’s international expansion has been a success, with operations spanning over 100 countries and a European headquarters in Ireland.
Embracing Innovation with Base
Coinbase’s foray into blockchain technology with its proprietary blockchain, Base, has been a game-changer. In just six months, Base’s user base exceeded 3 million, and its DeFi economy surged from $8.5 million to over $560 million, generating $6 million in profits for Coinbase.
Seizing the Opportunity
With a revamped business model, international presence, and innovative offerings. Coinbase is poised for growth as the crypto market gears up for a potential bull run. Despite trading below its all-time high, Coinbase’s improved fundamentals and the crypto market’s upward momentum make it a compelling investment opportunity.
Instead of navigating the complexities of individual cryptocurrencies, investing in Coinbase offers exposure to the broader crypto market through a reliable and innovative company. As Coinbase continues to evolve and expand its offerings, its potential for growth in the coming months is substantial.
