Coinbase(US:COIN) Guohai Securities·2024-06-14 07:31Investment Rating - The report assigns a "Buy" rating for Coinbase, indicating a positive outlook for the company's future performance [88]. Core Insights - The cryptocurrency market is expected to enter a new upward cycle, with Coinbase's strong compliance measures and robust growth potential driving its performance [88]. - The report highlights a significant decline in monthly trading users (MTU) from 8.8 million in 2022 to 7.4 million in 2023, primarily due to changes in the staking service and a decrease in trading volume [12][71]. - Coinbase's trading revenue is projected to grow significantly, with expected year-on-year growth rates of 199.7%, 73.6%, and 16.3% from 2024 to 2026 [71]. Summary by Sections Company Overview - Coinbase is recognized for its user-friendly platform, low fees, and a wide range of cryptocurrency trading options [3][5]. - The platform supports various trading types, including limit orders, market orders, and margin trading [4]. User Metrics - Monthly Trading Users (MTU) have shown a downward trend, with a notable drop in users participating in trading activities [12]. - The average MTU for 2021, 2022, and 2023 were 8.4 million, 8.8 million, and 7.4 million respectively, reflecting a decline in user engagement [12]. Financial Projections - The report forecasts trading revenue growth driven by increased trading volumes and a favorable market environment [71]. - Projected trading fees are expected to decrease slightly over the next few years, with rates of 0.39% in 2024 and 0.41% in 2026 [71]. Regulatory Environment - Coinbase has obtained various regulatory approvals, including a license from the National Futures Association to operate as a futures broker [48]. - The report emphasizes the importance of compliance in the evolving regulatory landscape for cryptocurrency [47][68]. Competitive Landscape - The report notes that Coinbase faces competition from other exchanges but maintains a strong position due to its high security standards and regulatory compliance [25][50]. - The emergence of low-cost Bitcoin ETFs may impact Coinbase's trading volumes, as investors may prefer trading actual Bitcoin through these ETFs [52].