Tim Collins doesn’t know what’s going on with Coinbase (COIN) , but he’s confident that something is tee’d up.
The cryptocurrency marketplace made a splash when it IPO’d on NASDAQ earlier this year. After an initial pop well above $400, and a subsequent slide to the low $200s, it trades around $250 per share.
Over on Real Money, Collins writes that the stock is ready to do … something:
“I kinda like Coinbase Global here. Am I allowed to say that? After the big bounce in Bitcoin, we've seen it carryover to COIN. I'm not going to espouse the fundamental argument at the current valuation. Honestly, I don't have one. While COIN is the 800-pound gorilla, I don't think it has such a moat that it will go without challengers. We're seeing more and more DeFi apps and companies coming to market, some with banking and trading.”
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There’s a lot to pull apart here, but maybe the biggest piece of this analysis comes in Collins' quote: “I’m not going to espouse the fundamental argument… Honestly I don’t have one.”
What’s the case for Coinbase’s fundamentals? How can you evaluate the value that this company has? It’s hard to say because so much of this company’s value comes from one of the most volatile assets on the market (Bitcoin). The rest comes from a service that Coinbase provides, but which competitors could provide relatively easily as well.
While Coinbase does have plenty of competitors, it gets a lot of its value from market position. This company is still the biggest game in town when it comes to trading cryptocurrency, at least for now.