Despite Securities and Exchange Commission (SEC) Chairman Gary Gensler’s reservations about Bitcoin (BTC-USD) and Coinbase (NASDAQ: COIN), there are compelling reasons to consider a bullish stance on COIN stock as an alternative to waiting for a Bitcoin exchange-traded fund (ETF) approval.
For those not well-versed in cryptocurrency or not interested in managing a crypto-trading account, COIN stock offers direct exposure to the ongoing blockchain revolution. With no approved spot Bitcoin ETF yet, acquiring Coinbase shares provides an avenue to participate in the evolving landscape.
Anticipating a potential catalyst, investors might consider taking a position in Coinbase today in preparation for an approved spot Bitcoin ETF. While Gensler’s stance may not align with blockchain enthusiasts, the inevitability of a spot Bitcoin ETF approval remains, with the only uncertainty being which financial firm secures approval first.
Among potential contenders, BlackRock (NYSE: BLK) stands out due to its robust capital and influence, and notably, Coinbase has agreements to serve as a crypto custodian for BlackRock. If BlackRock secures approval, Coinbase could benefit from a new revenue stream.
Furthermore, a Bitcoin ETF approval would not only enhance Coinbase’s revenue but also bring heightened attention to the cryptocurrency realm. The extensive media coverage witnessed during recent Bitcoin price rallies would likely intensify with an approved spot Bitcoin ETF, making it prudent for investors to position themselves in advance.
Coinbase’s recent financial results for Q3 2023 indicate progress toward profitability. While the company is not yet income-positive, it reported a per-share earnings loss of just 1 cent for the quarter, a significant improvement from previous quarters. This result surpassed Wall Street’s forecast of a 55-cent loss per share. Additionally, Coinbase’s revenue exceeded expectations, posting $674 million compared to the projected $651 million.
Investors are advised to monitor Coinbase’s trading volume closely, as it plays a crucial role in the company’s financial performance. Although Q3 2023 trading volume declined to $76 billion from the previous quarter’s $92 billion, an improvement in this area could drive COIN stock to new highs.
For investors bullish on the blockchain, owning Coinbase shares can serve as a proxy for Bitcoin. Alternatively, investors who appreciate Coinbase’s improving quarterly results may opt for COIN stock without directly holding Bitcoin. In the event of an SEC-approved spot Bitcoin ETF, COIN stock could experience a significant boost, providing a blockchain-driven journey to new heights.
