Markets
Can Coinbase Reach $1 Trillion Market Cap?
Coinbase has shown remarkable growth and potential, but this may just be the beginning.
During the last years, Coinbase Global (PIECE OF MONEY 4.93%) has established itself as one of the main players in the cryptocurrency As the largest cryptocurrency exchange in the United States and one of the most well-known in the world, Coinbase’s influence and reach in the cryptocurrency industry is undeniable.
The question now is whether Coinbase can reach a $1 trillion market cap. For Coinbase to reach that milestone, it would need to increase its current valuation by another 1,400%. But if you dig a little deeper, it becomes clear that it could do it.
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Coinbase Roots and Growth History
To understand Coinbase’s potential future, we need to look at its 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 has evolved, so has Coinbase. While the company has only been publicly traded since 2021, data from before that point shows just how impressive its growth story has been.
Since 2019, Coinbase’s monthly active users have grown by over 700%. Quarterly volume on its exchange has grown from $7 billion in 2019 to $312 billion in Q2 2024, a staggering 4,000% increase. Revenue has seen similar levels of growth, 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. Past fundraising rounds show just how monumental Coinbase’s growth has been. In 2015, the company was valued at just under $500 million after its Series C fundraising. Since then, Coinbase has grown by over 12,000%; it is currently valued at around $65 billion.
What needs to happen for Coinbase to continue growing?
While another 12,000% surge is unlikely over the next decade, it’s clear that Coinbase has pretty much all the characteristics needed to reach a $1 trillion market cap. That’ll probably be easier said than done, but the fact is that it just needs to keep doing what it’s been doing for the past decade. That means continuing to build innovative products, serving as a gateway for traditional financial entities to explore crypto, and making it easier for retail investors to onboard.
The company’s commitment to innovation is evident in the launch of its own blockchain, Baseand his role in the recently approved spot Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) exchange-traded funds (ETFs) for which it provides custody services.
In addition, several favorable factors could promote this growth, including progress made in the regulatory field.
After years of what could be considered shaky regulation at best, clarity is on the horizon. Due to its infancy, cryptocurrency as a whole has struggled to find a legislative home and has generally encountered some resistance. But as cryptocurrency becomes better understood by politicians and lawmakers, the push to introduce supportive rather than restrictive regulation is becoming more evident.
As this progress continues, Coinbase will be able to benefit greatly. Over the past few years, Coinbase has operated in a regulatory environment that could only be described as less than ideal. Yet, despite these obstacles, it has accomplished several feats. With crypto regulatory approval, Coinbase will be able to continue innovating and advance crypto adoption faster and further than ever before.
Some points to keep in mind
While nothing is certain, Coinbase has all the elements needed to potentially reach $1 trillion. market capitalization. As for when that will happen, there’s no telling. But for investors with a long-term horizon, there are few better options than Coinbase to give your portfolio exposure to high growth potential.
It operates in a booming industry, has experienced 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, combined 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 a must-watch player. Reaching a $1 trillion market cap is a lofty goal, but given its track record and strategic vision, Coinbase may have what it takes to reach that milestone sooner rather than later.
RJ 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.