To The Moon

The Crypto Backbone with Untapped Potential

Crypto is no longer a niche—it's a $2 trillion market reshaping finance, and $Coinbase Global, Inc.(COIN)$ is its trusted gateway. Investors often view Coinbase as a volatile crypto exchange, but they’re missing its transformation into a diversified financial services powerhouse.

With $6.67 billion in revenue, $273 billion in custodied assets, and a 65.2% revenue CAGR, Coinbase is more than a Bitcoin proxy—it’s a bet on Web3, stablecoins, and institutional adoption. Despite a 3.62 beta, its $8.05 billion cash reserve and regulatory moat make it a stable, high-upside play. Here’s why COIN is a compelling long-term investment, especially for retail investors overlooking its hidden strengths.

A Fortress of Financial Strength

Coinbase’s financial health is a retail investor’s dream: $8.05 billion in cash (37% of $21.73 billion assets) covers 2 years of 2022’s $3.7 billion expenses, dwarfing peers like Kraken ($1 billion). Its 85.2% gross margin and $1.47 billion net income (EPS $5.87) reflect high profitability, while a 0.41 debt-to-equity ratio minimizes risk.

In 2022’s bear market, Coinbase cut costs 37% and grew subscription revenue 138%, rebounding to a 15.8% ROE by Q1 2025. Investors often miss this resilience, focusing on trading volatility. Yet, Coinbase’s $320 million insurance and 98% cold storage protected $114 billion in assets during the FTX collapse, proving its ability to weather shocks.

Web3 and Altcoin Exposure Without the Risk

Coinbase is an investor’s gateway to Web3 and altcoins, beyond Bitcoin and Ethereum. It lists 250 tokens (1.25% of 20,000 altcoins in existence), selectively curating Web3 leaders like Solana and Chainlink, avoiding 2022’s LUNA/FTT crashes through careful research. Its Base blockchain ($1 billion TVL) powers DeFi, generating stable fees, while $273 billion in custody captures institutional altcoin demand. USDC ($40 billion market cap) drives $500 million in annual interest, fueling DeFi liquidity. Retail investors often chase risky altcoins directly, missing COIN’s diversified exposure via trading, Base, and custody, which mitigates single-token risk while capturing Web3’s growth.

Regulatory Moat: A Hidden Edge

Coinbase’s $2 billion lobbying and U.S.-based compliance (SOC certifications, NY BitLicense) set it apart from peers like Binance ($4.3 billion fine) and FTX (2022 collapse). Its audited USDC reserves and ETF custody role (e.g., BlackRock’s IBIT) align with SEC standards, attracting $273 billion in institutional assets. Unlike Kraken’s $30 million SEC settlement, Coinbase fights lawsuits with $8.05 billion cash, shaping crypto laws. Retail investors often overlook this regulatory moat, which could unlock upside if 2025’s FIT21 Act passes, while non-compliant rivals face bans. This stability drove Coinbase’s 2022 market share gains post-FTX, with its stock rising from $40 to $207.22.

Attractive Valuation for Explosive Growth

At a 35.3x P/E and $52.78 billion market cap, COIN is reasonably valued for its 65.2% revenue CAGR. Its 5.0x P/B reflects Web3 intangibles (Base, USDC), and a forward P/E of ~25x (assuming 20% EPS growth to $12 by 2027) suggests large potential upside. Investors often fear the high volatility (3.62 beta) and 62.4x EV/EBITDA, but $1.2 billion in stable subscription revenue (custody, USDC, Base) and $8.05 billion cash mitigate volatility. If USDC scales to $100 billion or ETF AUM doubles, earnings could soar, making COIN a bargain for crypto’s mainstream adoption.

A Resilient Bet on Crypto’s Future

Coinbase isn’t perfect—SEC lawsuits and trading cyclicality pose risks—but its $8.05 billion cash, diversified revenue, and regulatory edge make it a standout. Many investors miss its Web3 leadership via Base, USDC’s $500 million income, and custody’s institutional pull. Its 2022 resilience (138% subscription growth, no FTX exposure) and 2024 recovery ($1.47 billion net income) prove it can thrive through volatility.

As crypto goes mainstream, Coinbase is the leading platform powering Web3, stablecoins, and crypto ETF adoption. With ~40% upside and a regulatory moat, COIN is a high-conviction buy for the next decade. Don’t sleep on this crypto giant.

(All data as of 13 May 2025)

@Tiger_comments