Coinbase (COIN) shares have experienced a significant drop of 16% in the past five days, reflecting the overall volatility in both the cryptocurrency and stock markets. However, one analyst believes that investors may be missing out on a potential buying opportunity.
In a recent Unchained Crypto podcast, crypto analyst Will Clemente stated, “The street isn’t really pricing in the crypto native revenue that I think a lot of the crypto natives understand.” He compared Coinbase to Tesla, describing it as “the biggest kind of venture-style bet in public markets since maybe Tesla about five years ago.”
Clemente argued that traditional investors still perceive Coinbase solely as an exchange, despite the company making several changes to its business structure over the past year. He highlighted Coinbase’s Ethereum layer-2 network, Base, which currently has a total value locked (TVL) of $5.35 billion and facilitates 30.81 daily transactions per second. Clemente explained that Base generated $30 million in top-line revenue for Coinbase over the last 30 days, primarily from sequencer fees, which amounts to an annual revenue of approximately $360 million. He suggested that traditional investors are overlooking the significant on-chain activity happening on Coinbase.
As of now, COIN is trading at $218.08, a decrease of nearly 16% in the past five days, according to Google Finance data.
Coinbase is expected to release its earnings report for the first quarter of 2024 in the coming weeks.
During the same period, the S&P 500 has declined by 3.12%, while Bitcoin (BTC) has experienced a decrease of approximately 4.67%.
Furthermore, both markets are anticipated to face further downside as geopolitical tensions rise in the Middle East following reports of explosions at Isfahan airport in central Iran.
In related news, Cathie Wood’s ARK Invest continues to sell off its COIN holdings. On April 15, it was reported that ARK sold 3,689 COIN shares worth approximately $824,000. This comes after ARK sold a considerable amount of COIN stock a month ago, despite its price witnessing a year-to-date increase of around 54%. On March 21, Cointelegraph reported that ARK sold 199,526 Coinbase shares from its exchange-traded funds.
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