Hey folks, if you’re from the States, I hope you’ve enjoyed a fantastic Thanksgiving. Today’s article is going to be a 3rd entry in my series, “Things to Consider Before Entering the Bull Cycle,” where I dive into different strategies that I’m investigating in order to help position myself as best as I can for the upcoming bull market.
As a quick recap, in my first article I wrote about $GBTC, and if you started to DCA around that same time, you’d have at least around a 10% profit:
And in my second article in regards to Arweave, if you bought in around time of publishing, you would be sitting on more than 15% gains since then, or if you were lucky enough to sell when it topped around $9, you would have realized gains of around 35%:
In today’s article I’m going to be doing a bit of a deep dive into Coinbase, which in full transparency I’ve already been DCA’ing into over the past month. I don’t suggest buying into any major green candles, especially since $COIN bas been up-only since October, but regardless, I’m going to explain all the different catalysts that I’ve considered and why I continue to be extremely bullish on Coinbase’s future:
First let’s start out with the most recent:
Binance’s loss is Coinbase’s gain
With CZ stepping down and pleading guilty, Binance may be in the clear going forward, but in part of their agreement with the the Department of Justice, Binance now has to operate under the microscope of an independent compliance officer who according to Janet Yellen, “will be able to access Binance’s systems, transaction, and accounts and will review and report on all actions…”
https://dune.com/21co/binance-proof-of-reserve
I don’t imagine that it happens overnight, but over time I believe that for whatever FUD-related reasons they have over Binance some people will eventually be steering away and choose Coinbase instead.
Coinbase Custody and ETFs
Given the fact that $BTC ETFs are just around the corner, there’s several big players including Blackrock who have already explicitly stated that they are going to be holding their $BTC with Coinbase Custody:
Because Coinbase is a publicly traded company that’s fully regulated, I just can’t imagine any major financial institution willing to risk their assets to a different, untested, non-transparent entity other than Coinbase when entrusting millions/billions worth of crypto.
Coinbase and Circle
Back in August, Coinbase acquired a minority stake in Circle, the parent company who is in charge of $USDC.
Circle has been mulling over going public for some time now, and it’s still possible that they might in early 2024 — a catalyst which I speculate will be extremely bullish for not not just Circle, but for Coinbase as well. I’m uncertain of how successful Circle might be in the long-term, but I would imagine that there will be a considerable amount of hype for at least the short-term if they do.
Even if they don’t go public in early 2024, Coinbase has already shown huge gains in $USDC interest, and I’d imagine that this revenue stream will only continue to grow as more money flows into the crypto-space for the next bull market.
Other Factors Worth Considering
Although not as bullish, Coinbase has other attributes that I think are net-positives when considering their future outlook. These include:
Perpetual Futures
https://www.coinbase.com/advanced-trade/perpetuals
With so many different perpetual exchange options out there, I’m not sure how much marketshare Coinbase will be able to capture, but this is exciting to see nonetheless.
Their Own Layer-2
Coinbase’s OP-stack Base has seen its activity trail off over the past couple of months, but I still wouldn’t call their own layer-2 a nothing burger, as it’s still ranked #8 in most protocols and ranked #14 in most TVL.
Conclusion
As the only major Western publicly traded centralized cryptocurrency exchange out there, Coinbase has a huge leg up against its competitors and I imagine that their popularity will only continue to grow once the next bull market ramps up. I myself started my cryptocurrency journey years ago on Coinbase, and even to this day, I continue to recommend all my crypto-curious normie friends to do the same when they are taking their first crypto steps. Will it overtake Binance? Probably not, or at least not anytime in the near future. Regardless, I am extremely bullish on what the next several months has in store for their balance sheets.
Are there any significant considerations that you think I missed? Feel free to share them in the comments below. And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!
Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!
