Crypto Analyst Highlights Potential Buying Opportunity Amidst Coinbase Share Price Drop
Summary:
Over the past five days, Coinbase (COIN) shares have experienced a 16% drop, reflecting broader market volatility. However, crypto analyst Will Clemente suggests this could be a potential investment opportunity, likening Coinbase to a significant high-risk, high-reward investment like Tesla five years ago. Despite strategic changes made to its business structure, including the Ethereum layer-2 network, Base, traditional investors continue to view Coinbase solely as a crypto exchange. The company is due to release its Q1 earnings for 2024 soon, amidst expectations of further market depreciation due to escalating geopolitical disputes in the Middle East.
Over the last five days, Coinbase (COIN) shares have experienced a 16% drop, reflecting the wider unpredictability of both the crypto and stock markets. However, some analysts are indicating that this downtrend could present a valuable investment opportunity that many are overlooking. "The financial community is possibly underestimating the revenue scope in the crypto sector, which is well-understood by experienced players in the market," crypto expert Will Clemente stated during a recent session of the Unchained Crypto podcast.
Clemente pointed out that Coinbase is potentially the most significant high-risk, high-reward investment in the public market since Tesla's prominence five years ago. He opined that conventional investors tend to perceive Coinbase only as an exchange platform, ignoring the company's remarkable evolution and modifications in operational strategy over the past year. "During challenging market conditions, Coinbase implemented strategic modifications, propelling itself towards becoming a comprehensive crypto application," he asserted.
Clemente highlighted the significance of Coinbase's Ethereum layer-2 network, Base, which currently has a total locked value (TVL) of $5.35 billion and manages 30.81 transactions each second. "Base has generated $30 million in revenue for Coinbase in the past 30 days, through sequencer charges alone, which, if annualized, amounts to around $360 million in a year." He further criticized conventional investors for potentially neglecting the huge volume of on-chain activities. "Most of the financial community seems unaware of Base's existence, much less the potential profits that Coinbase could gain from the considerable network activities and sequencer charges," he said.
According to Google Finance, COIN shares are now being traded at $218.08, representing an almost 16% decrease over the past five days. The company is due to declare its first quarter earnings for 2024 in the coming weeks. Over the previous five days, there was a 3.12% downturn in the S&P 500, while Bitcoin (BTC) saw a decline of roughly 4.67%. Owing to the escalating geopolitical disputes in the Middle East, further depreciation is likely in both markets, particularly after reported explosions at Iran's central Isfahan airport.
Amidst these developments, Cathie Wood's ARK Invest has continued its selling drive of COIN shares. On April 15, it was revealed that ARK has sold 3,689 COIN shares, amounting to approximately $824,000. Just a month prior, ARK had unloaded a massive chunk of the stock during a period of year-to-date growth of around 54% in value. On March 21, reports stated that ARK had divested 199,526 shares of Coinbase from its ETFs.
Published At
4/19/2024 9:10:32 AM
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