Coinbase shares slump, but Base revenue signals it’s undervalued — Analyst

Over the past five days, the value of Coinbase (COIN) shares has dropped by 16%, following the trend of increased volatility in both the cryptocurrency and stock markets. However, one market analyst believes that this downturn could actually present an attractive purchasing chance for investors.

“Crypto analyst Will Clemente expressed on a recent ‘Unchained Crypto’ podcast that the street, or the general public, isn’t fully factoring in the crypto revenue that many crypto enthusiasts are aware of.”

“Coinbase is likely the largest venture-like wager in public markets since Tesla was around five years ago, according to Clemente’s perspective.”

Clemente pointed out that although Coinbase has significantly altered its business model in the last year, conventional investors continue to perceive it primarily as a cryptocurrency exchange.

During the bear market, they regularly adjusted their strategies to develop what I refer to as a multi-functional crypto application.

Specifically, he highlighted Coinbase’s Ethereum layer-2 network, named Base, boasting a total value of $5.35 billion currently secured and managing approximately 30,810 transactions every second.

In the past 30 days, the Base segment generated approximately $30 million in sales for Coinbase solely from sequencer fees. This equates to an estimated annual revenue of around $360 million. It’s essential to note that this substantial activity occurs on-chain, which some traditional investors might be disregarding.

“The street doesn’t even know what Base is, and they’re definitely not extrapolating out the potential of a ton of activity taking place there and the sequencer fees that Coinbase may benefit from that.”

According to Google Finance’s latest information, COIN was priced at around $218.08 when this statement was made. However, its value has dropped by nearly 16% in just the last five days.

Coinbase shares slump, but Base revenue signals it’s undervalued — Analyst

In the upcoming few weeks, Coinbase will unveil its financial results for the first three months of 2024.

In the last 5 days, the S&P 500 index has dropped about 3.12 percentage points, whereas Bitcoin (BTC) has fallen around 4.67 percent.

In the meantime, there are anticipations of further declines for both markets as tensions in the Middle East heighten following news of blasts at Isfahan Airport in Iran’s center.

The news comes amid Cathie Wood’s ARK Invest continuing its selling spree of COIN.

On April 15, it was reported that ARK sold 3,689 COIN shares worth approximately $824,000.

A little over a month ago, ARK significantly reduced its holdings of the stock as its value had risen by around 54% since the beginning of the year.

On March 21st, according to a report by CryptoMoon, ARK disposed of 199,526 shares of Coinbase from its exchange-traded funds.

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2024-04-19 10:14