Markets
Can Coinbase Reach a $1 Trillion Market Cap?
Coinbase has shown remarkable growth and potential, but it may just be getting started.
In the last few years, Coinbase Global (CURRENCY 4.93%) has established itself as one of the main players in the cryptocurrency market. As the largest cryptocurrency exchange in the United States and one of the most well-known globally, Coinbase’s influence and reach in the cryptocurrency industry is undeniable.
The question now is whether Coinbase can reach a $1 trillion market cap. To reach that milestone, Coinbase would need to make another 1,400% jump from its current valuation. But with a little digging, it becomes clear that it could do it.
Image source: Getty Images.
Coinbase’s Roots and Its Growth Story
To understand Coinbase’s future potential, we need to look at its history and proven growth history. Founded in 2012 by Brian Armstrong and Fred Ehrsam, Coinbase has been at the forefront of the cryptocurrency revolution. As the cryptocurrency economy has evolved, so has Coinbase. Although the company has only been publicly traded since 2021, past data shows just how impressive its growth history has been.
Since 2019, Coinbase’s monthly active users transacting have increased by over 700%. Quarterly volume on its exchange has jumped from $7 billion in 2019 to $312 billion in Q2 2024, an astonishing 4,000% increase. Revenue has seen similar levels of growth, rising from $66 million in Q1 2019 to over $1.6 billion in Q2 2024, an increase of 2,300%.
But these are just recent numbers. Previous fundraising rounds show how monumental Coinbase’s growth story has been. Consider that in 2015, the company was valued at just under $500 million after its Series C fundraise. Since then, Coinbase has grown by more than 12,000%; it is currently valued at around $65 billion.
What needs to happen for Coinbase to continue growing
While another 12,000% move is unlikely in the next decade, it is clear that Coinbase exhibits almost all the characteristics that would be needed to reach a $1 trillion market cap. This will undoubtedly be easier said than done, but the simple fact is that all it needs to do is continue to do what it has been doing for the last decade or so. That means continuing to create innovative products, acting as a bridge for traditional financial institutions exploring cryptocurrency, and making it easier for retail investors to onboard.
The company’s commitment to innovation is evident in the launch of its blockchain, Baseand his role in the recently approved commercial Bitcoin (CRYPTO: BTC) and Ethereal (CRYPTO: ETH) exchange-traded funds (ETFs) for which it provides custody services.
In addition, several tailwinds are forming that could further facilitate this growth. The most obvious is the progress in the regulatory landscape.
After years of what would be considered, at best, shaky regulation, clarity is on the horizon. Due to its inception, cryptocurrency as a whole has struggled to find a legislative home and has generally met with resistance. But as politicians and legislators understand it better, efforts to introduce supportive, rather than restrictive, regulation are becoming more apparent.
As this progress continues, Coinbase will continue to… they derive immense benefit. It has operated in what can only be described as a less than ideal regulatory environment for the past few years. Yet despite these hurdles, it has still accomplished several feats. With a regulatory blessing for cryptocurrency, Coinbase will be able to pursue innovation and push the progress of cryptocurrency adoption faster and further than ever before.
Some things to keep in mind
While nothing is certain, Coinbase has all the elements needed to potentially reach a trillion dollars market capitalization. As for when that will happen, there’s no telling. But for investors with a long-term time horizon, there are few better options out there to give your portfolio exposure to high growth potential than Coinbase.
Operating in a rapidly growing industry, it has demonstrated impressive growth and has established itself as a formidable force in the cryptocurrency market. The company’s commitment to innovation, cost management and regulatory compliance, along with strategic partnerships and market expansion, positions it well for future success.
As the cryptocurrency market continues to evolve and mature, Coinbase’s established presence and continued growth efforts make it an interesting player to watch. Reaching a $1 trillion market cap is an ambitious goal, but given its track record and strategic vision, Coinbase may have what it takes to reach this milestone sooner rather than later.
Mr. Fulton has positions in Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has a disclosure policy.