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Coinbase is a company I have covered several times in the past, dating back to the middle of 2023. We have owned the stock on and off in the Technology Innovators portfolio service I run, including capturing a 58.92% gain from June to December last year. Though the stock has nearly tripled over the past twelve months, I want to cover it again because several new bullish catalysts have emerged, the fundamental picture is stronger than ever, and the stock is still dirt cheap. That said, below is my bullish thesis for Coinbase.
Coinbase Global Overview
Zacks Rank #1 (Strong Buy) stock Coinbase Global ((COIN - Free Report) ) is the third-largest crypto exchange globally and the leading crypto exchange in the United States in terms of trading volume. Coinbase, which was founded in 2012, has one of the broadest selections of cryptocurrency listings to trade. Clients can choose to trade some ~250 cryptocurrencies, three fiat currencies, and nearly 600 crypto trading pairs.
Bitcoin ETF Success: A Blueprint for Future Revenue Streams
The launch of several spot Bitcoin ETFs, such as the iShares Bitcoin Trust ((IBIT - Free Report) ), marked a turning point for the U.S. crypto industry. The spat of Bitcoin ETFs was not only the most successful launch in history, they overwhelmingly beat the previous winner, the SPDR Gold Shares ETF ((GLD - Free Report) ) launch from 2004. Obvious beneficiaries of the spot Bitcoin ETF launch include ETF operators such as Blackrock ((BLK - Free Report) ), institutional investors, and Bitcoin investors as well as proxies such as MicroStrategy ((MSTR - Free Report) ). However, the biggestbeneficiary is Coinbase. Not only does Coinbase have a stranglehold on crypto investing in the U.S., but it is is uniquely positioned to take advantage of the influx of new institutional and retail investors using the ETFs as their preferred Bitcoin vehicle. Because Coinbase is the largest and only major publicly traded crypto exchange, it provides custody services for the major ETFs and is seeing its earnings benefit dramatically as a result.
Ethereum ETF: A New Bullish Catalyst for Coinbase
The Bitcoin ETF launch was a milestone for the industry beyond just Bitcoin adoption; it marked a distinct change in the Securities and Exchange Commission’s (SEC) crypto stance. After losing several court cases, regulators are warming up to crypto markets, loosening regulations. Meanwhile, after the blockbuster launch of the Bitcoin ETF, Blackrock, the world’s largest asset manager, has its eyes set on the second largest cryptocurrency globally, Ethereum.
Ethereum ETF Approval Looks Likely as Blackrock Files a FORM S-1
A FORM S-1 is a filing that details the initial registration for a new security. Blackrock’s new FORM S-1 registration statement is for an “iShares Ethereum Trust” ETF. Eric Balchunas, the top ETF analyst at Bloomberg, puts the chances of Ethereum ETF approval at about 90%. But don’t just take his word for it; look at Blackrock’s ETF approval history. Nobody is perfect, but Blackrock’s ETF approval history is close. BLK has enjoyed 576 ETF approvals and just one rejection in its history!
Image Source: TradingView
Ethereum ETF approvals are expected to occur later this summer, and assuming they are approved, Coinbase will undoubtedly be the custodial exchange for the majority of ETH ETFs, assuming they are approved.
COIN Technical Breakout + Relative Strength
Last week, COIN broke its short-term downtrend line, cleared the 50-day moving average, and is exhibiting relative strength versus equities.
Image Source: TradingView
COIN Fundamentals are Strong
Even if investors were to assume that the Ethereum ETF does not receive approval, COIN’s fundamental picture paints a pretty picture as total assets have soared in recent quarters.
Image Source: Zacks Investment Research
Bottom Line
Coinbase is benefitting dramatically from the approval of spot Bitcoin ETFs. However, the stock may just be getting started as a potential Ethereum ETF approval looms.
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Bull of the Day: Coinbase Global (COIN)
Coinbase is a company I have covered several times in the past, dating back to the middle of 2023. We have owned the stock on and off in the Technology Innovators portfolio service I run, including capturing a 58.92% gain from June to December last year. Though the stock has nearly tripled over the past twelve months, I want to cover it again because several new bullish catalysts have emerged, the fundamental picture is stronger than ever, and the stock is still dirt cheap. That said, below is my bullish thesis for Coinbase.
Coinbase Global Overview
Zacks Rank #1 (Strong Buy) stock Coinbase Global ((COIN - Free Report) ) is the third-largest crypto exchange globally and the leading crypto exchange in the United States in terms of trading volume. Coinbase, which was founded in 2012, has one of the broadest selections of cryptocurrency listings to trade. Clients can choose to trade some ~250 cryptocurrencies, three fiat currencies, and nearly 600 crypto trading pairs.
Bitcoin ETF Success: A Blueprint for Future Revenue Streams
The launch of several spot Bitcoin ETFs, such as the iShares Bitcoin Trust ((IBIT - Free Report) ), marked a turning point for the U.S. crypto industry. The spat of Bitcoin ETFs was not only the most successful launch in history, they overwhelmingly beat the previous winner, the SPDR Gold Shares ETF ((GLD - Free Report) ) launch from 2004. Obvious beneficiaries of the spot Bitcoin ETF launch include ETF operators such as Blackrock ((BLK - Free Report) ), institutional investors, and Bitcoin investors as well as proxies such as MicroStrategy ((MSTR - Free Report) ). However, the biggestbeneficiary is Coinbase. Not only does Coinbase have a stranglehold on crypto investing in the U.S., but it is is uniquely positioned to take advantage of the influx of new institutional and retail investors using the ETFs as their preferred Bitcoin vehicle. Because Coinbase is the largest and only major publicly traded crypto exchange, it provides custody services for the major ETFs and is seeing its earnings benefit dramatically as a result.
Ethereum ETF: A New Bullish Catalyst for Coinbase
The Bitcoin ETF launch was a milestone for the industry beyond just Bitcoin adoption; it marked a distinct change in the Securities and Exchange Commission’s (SEC) crypto stance. After losing several court cases, regulators are warming up to crypto markets, loosening regulations. Meanwhile, after the blockbuster launch of the Bitcoin ETF, Blackrock, the world’s largest asset manager, has its eyes set on the second largest cryptocurrency globally, Ethereum.
Ethereum ETF Approval Looks Likely as Blackrock Files a FORM S-1
A FORM S-1 is a filing that details the initial registration for a new security. Blackrock’s new FORM S-1 registration statement is for an “iShares Ethereum Trust” ETF. Eric Balchunas, the top ETF analyst at Bloomberg, puts the chances of Ethereum ETF approval at about 90%. But don’t just take his word for it; look at Blackrock’s ETF approval history. Nobody is perfect, but Blackrock’s ETF approval history is close. BLK has enjoyed 576 ETF approvals and just one rejection in its history!
Image Source: TradingView
Ethereum ETF approvals are expected to occur later this summer, and assuming they are approved, Coinbase will undoubtedly be the custodial exchange for the majority of ETH ETFs, assuming they are approved.
COIN Technical Breakout + Relative Strength
Last week, COIN broke its short-term downtrend line, cleared the 50-day moving average, and is exhibiting relative strength versus equities.
Image Source: TradingView
COIN Fundamentals are Strong
Even if investors were to assume that the Ethereum ETF does not receive approval, COIN’s fundamental picture paints a pretty picture as total assets have soared in recent quarters.
Image Source: Zacks Investment Research
Bottom Line
Coinbase is benefitting dramatically from the approval of spot Bitcoin ETFs. However, the stock may just be getting started as a potential Ethereum ETF approval looms.