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Summary

Crypto analyst Will Clemente sees Coinbase’s stock as a lucrative opportunity comparable to Tesla in its early days, emphasizing its revenue potential beyond the exchange business.

Introduction

Will Clemente, a crypto analyst, believes that Coinbase’s stock (COIN) presents a significant opportunity for investors, akin to a venture-style bet similar to Tesla in its early stages. He suggests that the market underestimates Coinbase’s revenue streams beyond just its exchange services.

Main Points

Clemente points out Coinbase’s shift towards becoming a “Crypto Super App” and expanding its services beyond traditional exchange offerings. He highlights the launch of Base, an Ethereum layer-2 network, which is generating substantial revenue through sequencer fees, often overlooked by traditional investors.

Despite being relatively new, Base Network has already amassed a total value locked (TVL) of $5.35 billion, translating to potential annual revenues of $360 million based on daily transaction volumes. Clemente sees this as an undervalued source of revenue for Coinbase.

However, Coinbase’s share price has declined recently in line with overall market volatility, dropping nearly 16% in the past five days due to broader market weakness and geopolitical tensions affecting market sentiment.

Furthermore, ARK Invest, led by Cathie Wood, has been reducing its Coinbase holdings, with recent sales of 3,689 shares adding to previous divestments. This trend continues despite Coinbase’s earlier year-to-date share price gains before the recent decline.

Conclusion

Although Coinbase’s stock has experienced a downturn in line with market trends, Will Clemente remains optimistic about the untapped potential of Coinbase’s revenue streams beyond its exchange services, suggesting a significant opportunity for investors willing to take a long-term view.

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