Coinbase Stock At 40% Safety?

Core Viewpoint - Coinbase Global (NASDAQ:COIN) has experienced a significant surge of nearly 30% over the past week, driven by the passage of stablecoin regulation, which is beneficial for the company as stablecoins represent its second-largest revenue source [1] Company Performance - COIN stock has increased approximately 60% since Donald Trump's election as President [1] - The stock is currently trading around $310, with a potential entry point suggested at $180, representing a 40% discount [1][6] Investment Strategy - A proposed trade involves selling long-dated Put options with a strike price of $180, expiring on June 18, 2026, which could yield an 8.5% return on the cash set aside for the option [4][5] - The overall yield could exceed 12% when considering additional interest from cash parked in a savings account [5] Risk-Reward Dynamics - If COIN remains above $180, the investor retains the premium of $1,515, equating to an 8.5% return on the cash [8] - If COIN falls below $180, the effective cost basis for acquiring the stock would be approximately $164.85, a 47% discount from the current price [8][9] Company Fundamentals - Coinbase is the largest U.S.-listed crypto exchange, benefiting from stablecoin growth through partnerships, particularly with Circle [11] - The company reported nearly $2.6 billion in net profits last year, with net margins of 40% [11] - COIN's stock trades at about 39 times estimated FY'26 earnings, which is typical for high-growth companies in the crypto sector [11]