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Analysts See 51% Upside in Coinbase, Is It Time to Buy the Hype?
COINCoinbase(COIN) MarketBeat·2024-09-16 11:22

Core Viewpoint - Coinbase is a leading cryptocurrency exchange with a bullish outlook from Wall Street analysts, who have set an average price target of 247,indicatingapotentialupsideof51247, indicating a potential upside of 51% from current levels [1] Revenue Sources - Coinbase generates revenue primarily from two sources: transaction fees from buying and selling cryptocurrencies and subscription and services revenue [1][2] - Transaction revenue is mainly derived from retail traders, while subscription and services revenue comes from stablecoin revenue and blockchain rewards [2][4] - The company co-founded USD Coin (USDC), a stablecoin pegged to the U.S. dollar, generating revenue through interest on dollar reserves backing USDC [3][4] - Blockchain rewards, or staking, allow users to validate transactions, with Coinbase earning a portion of the rewards [3][4] Revenue Growth - Stablecoin revenue increased by 59%, and blockchain rewards surged by 111% over the past year [4] - Consumer transaction revenue accounted for 46% of total revenues, while stablecoin and blockchain rewards contributed 17% and 13%, respectively [4] Market Dynamics - Retail demand is crucial for Coinbase's long-term growth, as half of its revenues depend on crypto trading volume, which is highly volatile [5][6] - Institutional trading volume has significantly surpassed retail trading volume, with the last quarter showing institutional volume at 189 billion, over five times higher than consumer trading volume [6][7] Retail Interest Trends - Evidence suggests that retail interest in Bitcoin is declining, with transactions under 10,000reachingathree−yearlowinJuly[8]−Thetotaltradingvolumeforcryptoin2024isnearly10,000 reaching a three-year low in July [8] - The total trading volume for crypto in 2024 is nearly 96 trillion, comparable to the total U.S. stock market trading volume of $101 trillion, indicating that most retail traders may have already entered the market [9][10] Future Opportunities - There is potential for growth in the stablecoin segment, as it offers a stable asset without the volatility of cryptocurrencies, appealing to privacy-conscious users [11]