When FTX collapsed in November, one of the world’s largest and most powerful cryptocurrency exchanges was exposed as an outright scam.
Investors were left feeling betrayed. Some lost their life savings. And market sentiment plunged into “Extreme Fear” territory.
By the end of 2022, the wave of panic had shaved 75% off the prices of Bitcoin (BTC) and Ethereum (ETH) from their all-time highs.
The damage was even worse for the popular U.S. crypto exchange Coinbase (COIN), whose shares plummeted 86% from where they started the year.
But the tides are changing for crypto in 2023.
As I write this, COIN shares have already gained +42% year-to-date (YTD), and my bet on Coinbase as a stock that could triple in 2023 is paying off beautifully.
And this could be just the start for COIN.
Coinbase has real momentum behind it – and our data provides the cold, hard facts to prove it…
The Bullish Case for Coinbase
Coinbase’s performance is closely tied to interest in Bitcoin and Ethereum – which is on the rise.
These are the number one and number two cryptos in the world by market cap, after all: When folks look to buy BTC or ETH, they can find them on Coinbase.
Together, BTC and ETH comprised more than 60% of Coinbase’s trading volume in the third quarter (31% and 33%, respectively).
Ethereum and Bitcoin are already showing signs of positive momentum, with both posting +27% gains or higher in the last month.
Coinbase is cutting costs.
Last week, it announced plans to lay off 20% of its staff, and that’s on top of the 18% it laid off last summer.
Many deem this a critical move that could power a turnaround for the company and its stock.
Coinbase is increasingly being viewed as a legitimate “safe haven” for crypto investors.
Its financial statements are audited by a Big Four accounting firm. These firms have been unwilling to audit peers like Binance and other private cryptocurrency platforms.
And that gives Coinbase a huge competitive advantage.
We’ve seen this transparency and accountability boost Coinbase’s consumer happiness levels, especially after the FTX collapse in early November of last year.
COIN sentiment has improved by +4 points YoY and +15 points from July lows spurred by an SEC probe.
Demand is back on the rise after several quarters of decline, with mentions from consumers using or adopting that platform rising +47% quarter-over-quarter (QoQ).
And this renewed interest coincides with crypto trading activity: “Trading crypto” mentions are once again increasing at a strong pace.
Bottom line: Coinbase appears to be the major winner of renewed consumer interest in cryptocurrency.
Landon, Megan, and I discussed the bullish case for Coinbase in depth over the holidays, so be sure to check out that (prophetic) conversation here if you haven’t already.
Coinbase isn’t slated to report fourth-quarter earnings for another month. But if current trends hold up, guidance may be much better than expected.