đWhat the Tigers Say | Coinbase Joins S&P 500: Headed Back to $300?
@TigerClubďź
Bitcoin has recently reclaimed the $100K mark, reigniting bullish sentiment across the crypto market. Meanwhile, Coinbase is set to join the S&P 500 Index, replacing Discover Financial Servicesâa milestone that sent its shares soaring over 10% in after-hours trading. Despite reporting Q1 earnings of $65.6 million (24 cents per share), down sharply from $1.18 billion ($4.40 per share) a year ago, Coinbase still sees momentum, thanks in part to growth in stablecoin revenue. However, the numbers came in shy of Wall Streetâs expectations. The market is watching closely. When Palantir joined the S&P 500 at $30 last September, its stock jumped 14% that day. Now with Bitcoin crossing $101K, could Coinbase follow a similar pathâand possibly reclaim the $300 level? đSpecial Notes: Whoever showed up on theâ What the Tigers Sayâ column will receive 100 Tiger Coins and an exclusive interview invitation to honor your contribution. Click titles to read the full analysis: 1. @orsiri: Key Points: Index Inclusion Isnât Just a TitleâItâs a Catalyst Passive capital is now in motion. With Coinbase replacing Discover Financial Services in the S&P 500, billions in index-tracking funds are being forced to buy. The average daily volume sits around 9.4 million shares, but that figure has already quadrupled following the announcement. Short interest remains moderate at 4.73% of float, but enough to fuel short-term momentum. These structural flows can generate exaggerated near-term price actionâparticularly when paired with a strong underlying macro tailwind. Institutions Already Know Whatâs Coming Coinbaseâs institutional ownership stands at over 57%, signalling strong confidence from professional investors. With $8.05 billion in cash and no dividend obligations, the company retains capital flexibility that many legacy financial players envy. It also posted $306 million in levered free cash flow, and maintains a current ratio of 2.52âproof of financial resilience in a highly cyclical sector. Despite crypto's volatility, this is a balance sheet built to survive and scale. Valuation Still Leaves Room to Run At a trailing P/E of 48.2 and a forward P/E of 32.57, Coinbase might appear expensiveâbut that narrative fades fast when growth is factored in. Traditional valuation tools often fail to fully capture upside in innovation-driven sectors. Even with a lofty PEG ratio, the revenue multiple of 8.16 and EV/EBITDA of 26.07 show that the market is beginning to re-rate the company as a high-growth fintech platform, not just a trading venue. A $300 price target would imply a price/sales multiple of just over 10âaggressive, but not unreasonable in a renewed bull cycle. The Quiet Upside: A Crypto Flywheel in Motion One insight investors may be missing is how Coinbaseâs broader ecosystem benefits from rising crypto confidence. From staking to custody to institutional flows, revenue diversity is increasing. As crypto becomes more integrated into traditional asset allocations, $Coinbase Global, Inc.(COIN)$ stands as the de facto gateway for many institutions and retail investors alike. Its platform loyalty, brand trust, and regulatory head start create a powerful network effect that hasnât been fully priced in. 2. @hakunaurtata: Key Points: "There are decades where nothing happens; and there are weeks where decades happen". Congrats to all shareholders! Luckily I haven't sold that covered call for this round yet haha, looks like the handle of the cup is finally forming! 3. @highhand: Key Points: Its going up as institutional holdings grow. Crypto is also resurging as Trump is ultimately a supporter. The previous correction was a chance to add. BTC to 200000! 4. @Jacob X: Key Points: A Fortress of Financial Strength Coinbaseâs financial health is a retail investorâs dream: $8.05 billion in cash (37% of $21.73 billion assets) covers 2 years of 2022âs $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 2022âs 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, Coinbaseâs $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 investorâs 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 2022âs 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 COINâs diversified exposure via trading, Base, and custody, which mitigates single-token risk while capturing Web3âs growth. Regulatory Moat: A Hidden Edge Coinbaseâs $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., BlackRockâs IBIT) align with SEC standards, attracting $273 billion in institutional assets. Unlike Krakenâs $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 2025âs FIT21 Act passes, while non-compliant rivals face bans. This stability drove Coinbaseâs 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 cryptoâs mainstream adoption. A Resilient Bet on Cryptoâs Future Coinbase isnât perfectâSEC lawsuits and trading cyclicality pose risksâbut its $8.05 billion cash, diversified revenue, and regulatory edge make it a standout. Many investors miss its Web3 leadership via Base, USDCâs $500 million income, and custodyâs 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. Donât sleep on this crypto giant. 5. @yourcelesttyy: Key Points: Coinbase last hit $300 in November 2024, riding Bitcoinâs highs. At $207.22 now, reclaiming that level means a 45% jump from its May 12 close. Hereâs the breakdown: Bull Case: Bitcoinâs $101,000 surge, up 15% in a week, could drive Coinbaseâs trading volumeâalready at $439 billion in Q4 2024âto new peaks. The S&P 500 inclusion could mirror Palantirâs 14% day-one pop, pushing Coinbase to $235-$240. If momentum holds and crypto sentiment stays hot, $300 is within reach by June. Bear Case: Cryptoâs volatility is a wild card. A Bitcoin dip could drag Coinbase down, especially with its $8 billion cash pile tied to market swings. Regulatory risks, like lingering SEC scrutiny, might cap gains. Palantirâs rally took monthsâCoinbase might need similar time, risking a fade if hype cools. Coinbaseâs S&P 500 entry is a historic win, and with Bitcoin at $101,000, the stars align for a Palantir-esque run. A 14% initial pop to $235 is likely, with $300 possible if crypto momentum holds and the Deribit deal pays off. But itâs not a sure betâvolatility and regulation could cap the upside. Iâm cautiously bullish, eyeing a buy near $220 with a stop at $200, targeting $280-$300 by mid-June. 6. @Ragz: Key Points: A crypto-currency company joining the S&P500? This shows the emergence of BTC and other crypto-currencies into the mainstream and the possibility of more crypto firms joining S&P500. The future is here, folks! 7. @Barcode : Key Points: đ§ Technically Speaking: ⢠RSI crossover confirms momentum shift from consolidation to breakout ⢠Price smashed through the neckline and cleared a three-week horizontal resistance shelf, as shown by the Gann Square arc cluster ⢠Bollinger Bands exploded open with high-volume confirmation, marking one of the strongest expansions year-to-date đ Fibonacci + Market Context: ⢠Eyes on $275 as the next real-time target if price holds above the breakout zone ⢠Weekly close above the 0.786 log Fibonacci level (~$246.86) would validate the bullish continuation ⢠Failing that, even a hold above the Bull Market Support Band near $227 still preserves the larger uptrend 𧨠Sentiment Flip: From âloserâ âď¸ to leader, this isnât a meme bounce. Itâs structural. Market participants are rotating hard into crypto equities with leverage to BTC and ETH. Coinbase is ground zero for this thesis. đĄ Bonus Insight: COINâs P/S ratio remains elevated at 9.88, but traders are paying up for scarcity in regulated crypto rails with explosive upside. Forward EPS of 5.728 and accelerating turnover suggest this rerating might only be in the early innings. Questions for you: Now with Bitcoin crossing $101K, could Coinbase follow a similar pathâand possibly reclaim the $300 level? đPrizes đŻ All valid comments on the following post will receive 5 Tiger Coins. We strongly recommend selecting the "Also repost" button when posting a comment to receive more rewards. â°Duration 21 May (24pm EDT)
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