The largest US cryptocurrency exchange, Coinbase (NASDAQ:CURRENCY) stock has become a household name today. Majority of new investors in Bitcoin (CC:BTC USD) use Coinbase. The company went public in April via a direct listing.
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COIN stocks were as high as $342 in April and are currently trading hands near $225. This is a good entry point for investors. I am bullish on COIN stocks and think it will move higher in the coming months.
With that in mind, let’s take a look at the two catalysts driving COIN stock growth.
High growth prospects
A huge reason to consider COIN stocks is the huge growth prospects. The world has recognized the way cryptocurrencies work and there is growing interest from every segment. There is no denying that cryptocurrencies are here to stay and will be making big news in the near future. Coinbase will play a very important role in enabling investors to take advantage of the industry’s growth.
Coinbase caters to retail and institutional clients, meaning it has a huge market to cater to.
The Q1 profit of the company showed its strength. It generated revenue of $1.6 billion, up 792% from a year ago. Furthermore, the company had 56 million verified users at the end of the quarter and this shows that users rely on Coinbase to invest in cryptocurrencies. This is just an overview of how fast the company is growing and the potential to add new users in the coming years.
The company’s trading volume was $335 billion and user monthly transactions of 6.1 million.
As crypto gains popularity, Coinbase will see an increase in revenue and users. This will increase the COIN stock. Coinbase is consistently working to expand its offerings and if it succeeds in broadening the investment options available, it will be able to attract users to the platform.
Attractive updates for users
The company is the first authorized company to crypto custody in Germany and it is proof that Coinbase will be able to meet the demands of German regulators. This will allow Coinbase to expand to different countries in the future and receive similar approvals.
Coinbase recently signed an agreement with Alphabets Google (NASDAQ:GOOG, NASDAQ:GOOGL) and with Apple (NASDAQ:AAPL) for payment services. Under the agreement, US customers will be able to use their Coinbase debit card with Apple Pay and Google Pay to spend cryptocurrency credits on the go. It also allows users to earn crypto rewards.
This partnership will work in the company’s favor as it will see an increase in users looking for easy buying and selling of cryptocurrency. Coinbase automatically converts the cryptocurrencies to US dollars and sends the funds to the user’s card for purchases or withdrawals.
The bottom line on COIN Stock
Coinbase hasn’t gone very high since its debut, which is an opportunity for you to cash in on the growth. I am optimistic about the long-term prospects of cryptocurrency and I believe Coinbase is a trusted name when it comes to investing in cryptos.
If the prices of cryptos rise, the stock may soon rise.
COIN stocks have shown volatility in line with the swings in Bitcoin. However, the company does not rely solely on the performance of cryptocurrencies. It generates revenue from the transaction costs. Therefore, any volatility in crypto is good for the business as it will lead to higher trading volumes and higher revenues.
The rally in cryptocurrency prices in the first quarter attracted many investors to the platform. Many invested in cryptocurrencies for the first time and Coinbase made the most of it.
Q2 results will push the stock higher. All in all, COIN stock is a buy.
At the date of publication, Vandita Jadeja had no (direct or indirect) positions in the securities referred to in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication Guidelines.