The analyst said TradFi institutions trying to get into crypto, but are unsure how to begin, may use Coinbase stock to enter.
According to the co-founder of research firm Reflexivity Research Will Clemente, shares of major cryptocurrency exchange Coinbase Global Inc (NASDAQ: COIN) could serve as an indicator for the crypto sector. Clemente says Coinbase shares could be an “index play” for traditional finance (TradFi) firms looking for a way into the industry.
Clemente offered his opinion while speaking on an X (formerly Twitter) Space hosted by Bitcoin bull and tech investor Anthony Pompliano. The Reflexivity Research exec said:
“I think TradFi will probably view COIN as kind of an index play on crypto because they have so many different kinds of verticals now…Someone might come in the space and say, ” I bought some Bitcoin. I don’t really know which of these other assets to pick. Coinbase feels like a pretty safe kind of index style play.”
A Bitwise exec also shares this optimism and generally bullish sentiment. Speaking on the same Space, crypto asset manager Bitwise’s Chief Investment Officer Matt Hougan said he believes that Coinbase “is executing better than any financial services company in America”.
Hougan also seemed to review an earlier Bitwise forecast that Coinbase will double its revenue in 2024. On the Space, he said:
“I almost wonder if their revenues doubling will be too low. So we have a lot of conviction in that.”
MarketWatch data shows that Coinbase stock has recorded more than 374% in year-to-date (YTD) gains, beating out Bitcoin’s (BTC) 163% and Ether’s (ETH) 94%. The stock has also gained nearly 126% in 3 months, 54% in 1 month, and a healthy 9.37% in the last 5 days.
Coinbase Stock Supported by Multiple Updates
Several Coinbase updates that may be contributing to the stock’s rise in recent times. For instance, Coinbase is continuing its expansion in Europe and recently received a virtual asset provider (VASP) license from regulators in France. The license allows Coinbase to provide trading, custody, and related services to users in France who may transact using legal tender or other cryptocurrencies.
Another update is Project Diamond, a platform designed for institutions to tokenize and trade real-world assets. Backed by Coinbase, Project Diamond is powered by the exchange’s Base layer-2 scaling solution to deliver a robust and compliant platform to improve mass crypto and blockchain adoption.
Despite these and many more, Coinbase is still at loggerheads with the United States Securities and Exchange Commission (SEC). Last week, the SEC rejected Coinbase’s request for crypto rules, seemingly elongating the battle between both entities. In July last year, Coinbase asked the SEC for new rules on crypto assets that qualify as securities. Unfortunately, SEC Chair Gary Gensler recently announced a refusal for multiple reasons.
Firstly, Gensler pointed out that the current securities laws are robust enough to cover the crypto securities markets. He also added that the timing for rulemaking is wrong and that the SEC is still seeking comments on crypto rules. Lastly, Gensler suggested that rulemaking should be at the SEC’s discretion.
Interestingly, SEC Commissioners Hester M. Peirce and Mark T. Uyeda published a statement disagreeing with the agency’s decision. While the statement respects the SEC’s discretion on rulemaking, it notes that Coinbase’s petition raises specific issues around new technologies. The Commissioners state that these issues should be thoroughly addressed via concept releases, requests for comments, and public roundtables.
