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COIN: Value Hunting After the Sell-Off
Aurelie Barthere
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Key Takeaways
6 min read
  • Our base case scenario assumes no US recession in 2025 and views the current downturn as a correction within an ongoing crypto bull market
  • Given this premise, we find COIN's price levels attractive relative to its fundamental drivers: building a full-fledged crypto product suite and shaping the US regulatory agenda
  • Q1 2025 revenues are likely to contract, a development that markets may have partially anticipated
  • To manage risks, especially if we are wrong about our no-recession projection, we size our allocation modestly and will add as we gain confidence in the macro

Introduction

As equity and crypto markets correct (future S&P 500 down -9%, Nasdaq -13.5%, Russell 2000 -17.6%, BTC -29.6% from their respective peaks, as we write), and attempt to stabilize, some single names, among tokens and stocks, are reaching attractive values, in our view.

We added a small long position in Coinbase stock (COIN) last week, based on the simple rationale that the stock price had fully retraced the post-US-election (post-5-Nov-2024) ascent which is at odds with the more favorable business and regulatory environment that emerged post-election, notably the Securities and Exchange Commission (SEC) abandoning its investigation into the exchange.

In this note, we dig deeper, as we sketch the fundamental...