Even amid a Bitcoin and overall crypto market sell-off, cryptocurrency trading platform Coinbase (COIN) maintains a “bull thesis,” according to Owen Lau, Oppenheimer executive director, and senior analyst.
Lau was in an interview with Yahoo Finance, where he said,
“The bull thesis is the long-term crypto adoption….[The] number one thing the market has not given Coinbase credit, it’s on the crypto adoption longer term.”
Stocks of crypto-focused companies have fallen 60% from their highs this year, according to FactSet, with Coinbase down 40% year to date. However, Lau is still bullish on the stock.
Lau went on to call Coinbase,
“One of the most disruptive companies.”
According to CoinMarketCap, the entire crypto market has dropped 19% this year, while Bitcoin (BTC) has dropped 11%, causing some investors to become negative on the stock. This emotion is due to two factors, according to Lau.
Firstly, Lau says, the price of Bitcoin (BTC) has not been helpful to the price of the stock, pointing to a high correlation. According to his analysis, there is an 80%-90% correlation between the price of Bitcoin (BTC) and the price of Coinbase stock.
Second, many individuals, according to Lau, talk about fee compression, which he claims is,
“one of the most talk about like race to the bottom bear thesis against traditional exchanges, e-brokers and also now Coinbase.”
Last year, Coinbase President and COO Emilie Choi stated that the business was working on a trading fee compression as a strategy to diversify its revenue streams away from trading fees.
In an episode of the Superteam podcast that aired last week, Coinbase CEO Brian Armstrong discussed Apple’s crypto stance.
Armstrong said,
“Apple so far has not really played nice with crypto. They’ve actually banned a bunch of features that we would like to have in the app, but they just won’t allow it — so there’s potential antitrust issues there.”
The CEO of the cryptocurrency exchange emphasized that he does not want Coinbase to be like Apple. He said,
“Decentralized exchanges (DEXs) to me are very interesting for that reason.”