- Coinbase shares have jumped to the highest point in over two months.
- The company published encouraging financial results earlier this month.
- The firm has numerous tailwinds in the coming months.
Coinbase (NASDAQ: COIN) stock price has done modestly well in the past few days as investors reflected on the latest earnings. The shares are nearing $90, the highest level since August 4th. They have soared by over 27% from the lowest level this month and by 165% this year.
Coinbase is doing well
Coinbase, the biggest crypto exchange in the United States, has had several headwinds and tailwinds this year. The biggest headwind was the decision by the Securities and Exchange Commission (SEC) to sue the company. In the lawsuit, the SEC alleges that Coinbase offered unregistered securities to American customers.
It has had numerous tailwinds. For one, cryptocurrencies have outperformed other financial assets this year. Bitcoin has more than doubled from its lowest point in 2023. The total market cap of all digital currencies has jumped to over $1.3 trillion while most tokens have jumped.
Coinbase sees higher volume when cryptocurrencies are rising. At the same time, Coinbase could see more demand if the SEC approves ETFs by companies like Blackrock, Invesco, and Ark Invest. This is important because the company has been selected as a custodian for these assets.
Coinbase published mixed results last week. Its revenue in the third quarter came in at over $334 million as inflows of native assets jumped. Stablecoin volume, especially USDC, jumped during the month. Its expenses also slipped by 4% to $754 million.
Coinbase’s transaction revenue dropped to $288 million, which was expected since crypto volume remains quite low. It compensated this with robust growth in its subscription revenue, which jumped to $334 million from $210 million in the same quarter in 2022.
Coinbase is a good investment for two main reasons. First, it is one of the few registered and regulated companies in the United States. This gives it an advantage against companies like Binance and OKX.
Second, the company’s future is linked to Bitcoin, which I believe is quite positive. Bitcoin has done well despite major challenges in the industry like the collapse of FTX, Terra, and Mt. Gox. Therefore, there is a likelihood that the coin will continue doing well in the next few years.
Further, Conbase has more room to grow in the crypto industry. It can expand in the crypto derivatives industry which was a core part for FTX. In a statement, the company’s CEO said:
“Coinbase received regulatory approval from the BMA to enable perpetual futures for eligible non-U.S. retail customers, which we began offering just last month. And Coinbase Financial Markets also received regulatory approval from the NFA to offer futures to eligible U.S. customers via advanced trading.”
Coinbase stock price forecast
The 4H chart shows that the COIN share price has made a lot of progress in the past few months. It recently crossed the important resistance point at $86.40, the highest point in August and September. The shares have moved above the 50-period moving average while the Relative Strength Index (RSI) is nearing the overbought level.
Therefore, the outlook for Coinbase share price is bullish, with the next important price to watch being at $114.42, the highest point this year.
