Bitwise Heralds Coinbase (COIN) As The ‘Next Amazon’: Price Targets

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As a researcher with experience in the crypto and blockchain space, I find the comparison between Coinbase and Amazon drawn by Bitwise’s report intriguing and thought-provoking. The financial performance of Coinbase has been impressive, with significant growth across all business lines and strong revenue streams. However, the real game-changer could be Base Layer 2 network.

In a recent report released by Bitwise, the prominent crypto index fund manager, an intriguing analogy is made between Coinbase and Amazon. The authors, Matt Hougan and Juan Leon, bring attention to an overlooked facet of Coinbase’s operations: their Base Layer 2 network. Entitled “It’s All About That Base (and Other Insights into Coinbase),” this comprehensive report explores the financial and strategic transformations driving Coinbase’s recent achievements and potential growth prospects.

Amazon Of Crypto? Bitwise Projects Stellar Future For Coinbase

The financial reports released by Coinbase recently have been quite enlightening, showcasing strong expansion and streamlined operations. The corporation announced a net income of $1.6 billion, representing a substantial year-on-year rise of 116%, far exceeding the anticipated $1.36 billion revenue forecasted by analysts on Wall Street.

The profits were equally impressive, amounting to a total of $1.2 billion. Simultaneously, the cash reserves grew substantially to hit $7.1 billion. Each segment of Coinbase’s business experienced significant growth: consumer trading revenue surged by 93%, institutional trading by an impressive 105%, stablecoin revenue increased by 15%, blockchain rewards jumped by 59%, and custodial services reported a robust growth of 64%.

Although the company’s impressive figures have been unable to prevent a downward trend in its stock price, there’s more to Coinbase than meets the eye. Bitwise draws attention to an under-the-radar aspect of Coinbase’s business: its Base Layer 2 network.

As a researcher studying blockchain technologies, I’m excited about Base, a new initiative introduced on Ethereum in August. Its primary objective is to boost the network’s transaction capacity while keeping costs minimal. It functions much like a tab at a bar, gathering transactions together and settling them in groups. This method significantly reduces transaction fees below $0.01 and expedites processing times to under one second.

The surge in usage of Base has been remarkable. In the initial quarter, there was a 74% jump in transactions compared to the previous quarter. This increase was further accentuated by a 40% spike in April, contrasting the entire first quarter’s figures. The explosive growth in the community of developers, which expanded eightfold, is a clear reflection of Base’s growing importance and the broader industry’s mounting fascination.

Financially speaking, Coinbase has been profiting significantly from the Base network. In just the first quarter, Base generated $27.4 million in transaction fees, with Coinbase pocketing approximately $15.5 million. This lucrative revenue source persisted into April, bringing an additional $11 million in profits for Coinbase. Based on these trends, Bitwise anticipates that Base could soon be adding between $10 million and $20 million to Coinbase’s monthly earnings.

The comparison to Amazon is grounded in Base’s capacity for transformation. Much like Amazon started as a small online bookstore and blossomed into a retail behemoth and subsequently a major player in cloud computing via Amazon Web Services (AWS), Coinbase could undergo a comparable metamorphosis from a crypto brokerage to a foundational infrastructure supplier within the cryptocurrency sector.

As a market analyst, I would argue that this shift could significantly alter Coinbase’s function and influence within the crypto industry. By establishing itself as a foundational infrastructure provider, Coinbase could assume a role comparable to Amazon Web Services (AWS) in the realm of web services today.

The report concludes with my reflections on the potential impact of Base on Coinbase’s future business strategy. Based on initial findings, Coinbase could evolve into a crucial infrastructure provider within the crypto industry. Such a transformation would signify a significant shift and expansion in Coinbase’s role and influence.

COIN Price Analysis

Examining the technological terrain, the value of Coinbase (COIN) stands at a crucial juncture. Following a decline to $211.20 (at present), representing a 11.4% drop from its weekly peak of $235.79, the share is encountering noteworthy resistance and support thresholds that could influence its near-term trend.

Using a different phrasing: The Fibonacci retracement indicator, derived from a low of $31.62 and a high of $429.52, highlights significant price levels for COIN. Currently, the crypto is encountering resistance at the 0.5 Fibonacci level or $230.57. Meanwhile, the 20-week EMA at $199.35 plays a crucial role as support; the stock has rebounded after touching this mark recently.

With an RSI reading of 56.10, there is a relatively equal balance between market forces pulling in opposite directions – buying and selling pressure. However, there’s a slight edge towards buying activity. The latest price action, exemplified by a candlestick having a small body and elongated wicks, underscores the current apprehension and prudent approach among traders due to lingering market uncertainty.

Bitwise Heralds Coinbase (COIN) As The ‘Next Amazon’: Price Targets

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2024-05-09 11:47