Coinbase has consistently been making it to the crypto headlines, of late. It all started a couple of months back, thanks to its controversial ‘Lend’ program. Post that too, the exchange has been able to maintain its ‘making it to the news’ streak, owing to its recent announcements with respect to partnerships, NFTs and ETFs.
Well, quite recently the US-based exchange platform released a letter to its shareholders outlining its financial performance in Q3 among other things. As per the same, the company posted revenue figures of $1.24 billion, which was lower than the $1.57 billion forecast by analysts.
The public listed company may have missed Wall Street’s estimates due to the broader market turbulence observed in the aforementioned time period, but would most likely be able to turn tables around and make up for the same in the upcoming quarter.
The state of two crucial, intertwined factors fairly assured the same.
One – The Bitcoin factor
Bitcoin’s price is all set to rally in the upcoming weeks. In 2011 and 2017, the cumulative daily percentage change of Bitcoin’s price curve took the shape of a camel on the chart. Quite parallelly, in 2013, it was more like a dromedary.
Now, as far as 2021 is considered, the formation thus far resembles the latter and hence it is fair to only expect a long neck – an upward trajectory – moving forward. The odds of the aforementioned pattern materializing on the charts are fairly high, given the fact that the Bitcoin market is cyclic in nature and tends to mirror its past patterns.
Further, a host of our recent analyses also reinforce the macro rise in Bitcoin’s price and advocate that the king coin would be able to achieve its six-digit valuation in and around the Christmas period this year.
Two – The inflation factor
With every passing day, there is increasing evidence that inflationary pressures are broadening out, highlighting that the rate of increase in commodity prices will remain elevated for much longer than expected.
As per the latest data, inflation was significantly ‘hotter’ in the U.S. than the median month-on-month forecast. The core CPI was up 0.9%, against the 0.6% monthly estimate.
Having said that, it should parallelly be noted that the CPI jumped by 6.2% from a year ago in October, making it the biggest inflation surge in more than 30 years.
Now, the aforementioned data makes a strong case for Bitcoin’s demand to soar, given its inflationary hedge tag. People from the community on social media have already started asking others to climb onto the Bitcoin arkto shield themselves from the aforementioned ‘imminent flood.’
Well, the sprouting interest already managed to aid Bitcoin’s price to achieve a new high of $69k yesterday and the said rise is merely the trailer, according to many.
Joining the dots
Well, there’s one common thread that connects both the factors and Coinbase. As per their financial overview data, close to a quarter of its transactional revenue and trading volume [21% and 19% respectively] had come from Bitcoin in Q3. The numbers make it quite clear to what extent Coinbase’s success is dependent on Bitcoin and its price performance.
Inflation, along with other macro conditions, has the potential to trigger Bitcoin’s rally. Northbound movement on BTC’s chart would increase the demand for the asset organically. Additionally, people would also end up entering the space at such a time out of the fear of missing out.
In effect, the volumes would rise on exchanges and Coinbase would benefit from it by earning more through fees. The same would inevitably lead to improved last quarter’s results.
Further, alongside BTC’s price rally, one can expect COIN shares to also pick up pace in the same time period. Even though COIN ended up shedding a considerable amount of value when the results were announced, it was seen recovering at the time of writing. So, this might perhaps be the right time for investors to get COIN shares too. Mainly, because it would likely end up breaching its listing day highs of $430 by the end of this year.
At the end of the day, it takes two to tango and it goes without saying that Coinbase and Bitcoin are mutually dependent partners at this stage.
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FAQs
If Bitcoin goes up and people start buying, that's good for Coinbase. If Bitcoin goes down and people start selling, that can also be good for Coinbase. They also have the ability to expand into other business segments or even innovate new ones.
What will you use Coinbase for best answer? ›
Buy, sell, and store hundreds of cryptocurrencies
From Bitcoin to Dogecoin, we make it easy to buy and sell cryptocurrency.
What is the prediction for Coinbase 2024? ›
We estimate Coinbase net revenue for Q1 2024 to be $1.5 billion, growing by 65% for the quarter. Our estimate is much higher than the consensus gross revenue estimate of $1.2 billion. Bitcoin spot ETF approval and fresh all-time-highs meant trading volume doubled in Q1 2024.
What makes Bitcoin better than other coins? ›
Scarcity: As the supply of unrewarded coins diminishes, demand increases. There will only ever be 21 million bitcoins in existence. Divisibility: Bitcoin is much more divisible than fiat currencies. One bitcoin can be divided into up to eight decimal places, with constituent units called satoshis.
Is Bitcoin or Coinbase better? ›
By comparing Coinbase vs Bitcoin.com overall scores, we clearly see that Coinbase has the higher overall score of 9.1. Bitcoin.com, on the other hand, has scored 7.9 final points. One of the best hardware cryptocurrency wallets ever made. One of the leading cryptocurrency wallets in the current industry.
Is Bitcoin supported in Coinbase? ›
Coinbase Wallet supports the following networks: Ethereum, Polygon, Bitcoin, Dogecoin, Litecoin, Stellar Lumens, Ripple, and Solana.
What is the advantage of Coinbase? ›
Customers appreciate Coinbase's user-friendly interface, which simplifies the process of buying and selling cryptocurrencies, saving them valuable time. With its secure platform, Coinbase serves as a reliable bank for storing and safeguarding cryptocurrency assets.
What is special about Coinbase? ›
Coinbase Advanced Trade has advanced charting functions and allows users to make crypto-to-crypto transactions and place market, limit and stop orders. Coinbase also has an option called called Coinbase One, which offers no-fee trades and other benefits in exchange for a monthly fee of about $30.
Why Coinbase is the best exchange? ›
Coinbase is our pick for best crypto exchange for beginners because it offers a large number of supported cryptocurrencies, strong security, and advanced trading options, all on an easy-to-use platform.
What is the prediction for Coinbase? ›
Coinbase Stock Forecast
The 22 analysts with 12-month price forecasts for Coinbase stock have an average target of 183.45, with a low estimate of 43 and a high estimate of 325. The average target predicts a decrease of -18.24% from the current stock price of 224.37.
Coinbase Global
Shares of the digital-asset brokerage and exchange have skyrocketed 626% since the start of 2023, as they benefit from renewed interest in Bitcoin and the equities market. The momentum for Coinbase has carried over into 2024, as it's up almost 50% just this year (as of April 8).
What is the future of Bitcoin? ›
Bitcoin the Cryptocurrency
In 2024, the majority of bitcoins are still out in the wild, so to speak—but over time, and if they continue to be treated as a speculative investment and store of value, these large entities will likely keep growing their holdings.
What is the main advantage of Bitcoin? ›
Bitcoin is permissionless
This means that third-parties like banks, financial institutions, and governments stand between you and your money. Bitcoin requires no permission from anyone. It is free and open to use globally. There are no borders or limits with Bitcoin.
Why Bitcoin is the best asset? ›
Investors often seek assets with a history of robust performance, and Bitcoin doesn't disappoint. Despite its infamous volatility, Bitcoin has managed to outshine other asset classes over the past decade. In fact, it has been the best-performing asset class for eight out of the past eleven years.
Is it safe to invest in Bitcoin today? ›
Bitcoin is a risky investment with high volatility, and generally should be considered only if you have a high risk tolerance, are in a strong financial position already and can afford to lose some or all of your investment.
What are the three assets most correlated with Bitcoin? ›
Top 3 Assets Most Correlated with Bitcoin Revealed: Crypto Stocks, Silver, and Growth Funds.
What crypto is correlated with Bitcoin? ›
According to IntoTheBlock's Matrix, BTC has a correlation score of 0.95 with Litecoin (LTC). This is relatively high since the highest possible is 1.00. A correlation of 1.00 means the two cryptos 100% reflect each other's price changes.
How does Coinbase protect my Bitcoin? ›
At Coinbase, we're committed to security by using industry best practices and storing up to 97% of bitcoins in encrypted, geographically separated, offline storage.
Where does Coinbase get their Bitcoin from? ›
Originally Answered: How does Coinbase get the Bitcoin they sell? Coinbase is a Bitcoin exchange and all exchanges get their Bitcoin from people who are selling bitcoin and they make a percentage of the trade in form of transaction fees.
