COIN - Coinbase: Despite Temporary Crypto Surge There's More Risk Than Reward Here
2024-06-17 12:06:15 ET
Summary
- Cryptocurrencies, including Bitcoin, have surged over 60% year to date, with Coinbase shares also rising ~55%.
- The company is enjoying a temporary surge from elevated Q1 volatility, stemming in large part from the January release of spot Bitcoin ETFs.
- Over the long run, Coinbase faces stiff competition from Binance as well as brokerages like Robinhood, and its revenue exposure to altcoins may also cause it to trip.
- With the stock already trading at ~10x projected FY25 revenue, it's best to steer clear here.
Stocks aren't the only asset class that have soared this year: cryptocurrencies are also experiencing a huge surge, with anchor currency Bitcoin (BTC) up more than 60% year to date. The rise isn't attributed simply to increased investor appetite for risk-taking, however; it's also due to U.S. regulators' approval of the first-ever spot Bitcoin ETFs in January, which saw nearly $5 billion in inflows on the first day of trading ....
Coinbase: Despite Temporary Crypto Surge, There's More Risk Than Reward Here