Coinbase has shown impressive growth and potential, but it may just be getting started.
Over the past few years, Coinbase Global (coin 4.93%) Coinbase has established itself as one of the major players in the cryptocurrency market. As the largest cryptocurrency exchange in the United States and one of the best 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 this milestone, Coinbase would need to rise another 1,400% from its current valuation. But a little digging reveals that the company might be able to get there.
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Coinbase’s roots and growth
To understand Coinbase's future potential, we need to look at the company's past 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 evolves, so has Coinbase. The company has only been public since 2021, but a look at its data from before that shows just how impressive its growth story has been.
Since 2019, Coinbase's monthly active trading users have grown by over 700%. The exchange's quarterly trading volume has skyrocketed from $7 billion in 2019 to $312 billion in Q2 2024, a staggering 4,000% increase. Revenue has shown a similar growth rate, from $66 million in Q1 2019 to over $1.6 billion in Q2 2024, a 2,300% increase.
But these are just recent figures. Previous funding rounds show just how incredible Coinbase's growth story has been. In 2015, the company was valued at just under $500 million after its Series C funding. Since then, Coinbase has grown more than 12,000% and is now valued at roughly $65 billion.
What does Coinbase need to do to continue growing?
While it's unlikely to rise another 12,000% over the next decade, it's clear that Coinbase has nearly all of the necessary attributes to reach a $1 trillion market cap. That's easier said than done, but the fact is that the company just needs to keep doing what it's been doing for the past decade or so. That means continuing to develop innovative products, serving as a bridge between traditional financial institutions exploring cryptocurrency, and continuing to drive retail investor participation.
The company's commitment to innovation is evident with the launch of its own blockchain, Base, and its role in the recently approved Spot. Bitcoin (Cryptocurrency: BTC) and Ethereum (Cryptocurrency: ETH) Exchange-traded funds (ETFs) that provide custody services.
Moreover, there are several tailwinds shaping up that could further fuel this growth, most notably the evolving regulatory environment.
Clarity is on the way after several years of what could be described as regulatory uncertainty. As a nascent sector, cryptocurrencies as a whole have struggled to find a legal framework and have often encountered resistance. However, as politicians and legislators come to a greater understanding, efforts to introduce supportive rather than restrictive regulations are becoming more prominent.
Coinbase stands to benefit greatly if this progress continues. Over the past few years, the company has operated in a less than ideal regulatory environment. However, even with these obstacles, the company has managed to achieve some great feats. Regulatory approval for cryptocurrency will allow Coinbase to pursue innovation and drive cryptocurrency adoption faster and further than ever before.
Things to keep in mind
While nothing is certain, Coinbase has all the ingredients it needs to achieve a $1 trillion market cap. It's unclear when that will happen, but for investors with a long-term perspective, there are few better options than Coinbase to add high growth potential to their portfolio.
The company operates in a fast-growing industry and has experienced impressive growth, establishing itself as a powerful force in the cryptocurrency market. The company's commitment to innovation, cost control and regulatory compliance, combined with strategic partnerships and market expansion, has positioned it well for future success.
As the cryptocurrency market continues to evolve and mature, Coinbase's strong presence and continued growth efforts make it an attractive player to watch. Achieving a $1 trillion market cap is an ambitious goal, but given the company's track record and strategic vision, Coinbase may have the power to reach this milestone sooner rather than later.
RJ Fulton has invested in Bitcoin, Coinbase Global and Ethereum. The Motley Fool has invested in and recommends Bitcoin, Coinbase Global and Ethereum. The Motley Fool has a disclosure policy.
