Summary COIN's current valuation is excessive given its stagnant market share and fierce competition from both crypto and traditional financial institutions. Despite pro-crypto legislation and industry buzz, Coinbase's fundamentals and revenue growth have lagged, failing to surpass previous cycle highs. COIN's market cap now exceeds established exchanges like CME and ICE, which is unjustified given its limited economic utility compared to those platforms. I recommend selling or avoiding COIN at current levels; the risk/reward is unfavorable at these prices. I was a very vocal bull on Coinbase Global (COIN) during the crypto winter in 2022 (link here ) when it had a market cap of $15 billion and crypto exchanges/products were dropping like flies (link here ). I argued that at those valuations, COIN had a very good chance of doing well, due to its strong creditworthiness. COIN was trading at ~$60/share then and is $419/share now. But at its current market cap and with all this market buzz about pro-crypto legislation, I think the risks outweigh the value and potential. COIN stock price (StockCharts.com) 1. COIN operates in a very competitive market COIN operates in a very competitive market with existing competitors such as Binance. There’s not much inherent advantage you get from trading on COIN that you can’t get from trading at, say, IBKR or BTC ETFs. By one measure (per below chart , COIN’s market share was 6% in July 2025, virtually unchanged compared to 2022). Crypto trading market share is difficult to measure (and by some measurements, COIN’s market share is much higher), but the financial figures in the sections below seem to suggest that COIN probably hasn’t made much progress in terms of market share. Coinbase market share (The Block) The recent passage of the GENIUS Act , while ostensibly favorable for the crypto industry, does not have a clear mechanism to benefit COIN. Unlike 5 years ago, when mainstream financial institutions were less flattering in their view of crypto, nowadays many mainstream financial institutions are seriously trying to figure out how to capitalize on this market segment. Even if there is major growth from stablecoins, there will likely be lots of competing options, and JPM and Blackrock can probably offer a compelling (if not even more compelling) product given their size and stature. With the huge success of Bitcoin ETFs in terms of capital attracted , this will likely attract more competition from mainstream financial institutions. 2. COIN has market cap on par or even higher than many traditional exchanges Market cap at July 18, 2025 (CME ) $99bn ( ICE ) $103bn ( COIN ) $107bn When I made the above comparison in 2022, COIN had a market cap that was a fraction of traditional exchanges such as CME and ICE. Now COIN’s market cap surpasses that of CME and ICE. If we take a step back, does that really make sense from an economic perspective? Is the value of a crypto exchange going to exceed that of exchanges that trade hundreds of products, from oil to food, that we need on a day-to-day basis? Or, to put it another way, people and companies will be buying and selling futures on CME or ICE to hedge their exposure to foods, metals, etc., and they’re probably happy to let CME and ICE take a small cut out of that in order to conduct this activity on a well-established exchange. Whereas crypto traders are mainly trading back and forth the existing pile of Bitcoin, etc., while there is some value in this, I can’t see in the long run how such a crypto exchange would be able to extract more value out of this activity than exchanges such as CME and ICE that can out of hundreds of commodities and derivatives. While crypto may have its uses, you can’t eat Bitcoin or make cars out of it, etc. - CME and ICE are essentially “taxing” or taking a small cut out of trillions of dollars of recurring economic activity, whereas COIN is making money off people largely trading a few types of securities. I just don’t see COIN as being proportional to CME and ICE in the long run. 3. COIN fundamentals have not shown much growth While COIN revenues have grown substantially since my bullish piece in 2022, overall the growth has been rather slower than I anticipated: Revenues have only grown to $6.7 bn on a TTM basis, compared to $3 billion in 2022, and have not even exceeded the previous cycle’s highs (2021 revenues of $7.8bn). Profitability is also nowhere near previous cycle’s highs either; TTM net income is $1.5bn, possibly impacted by one-off items as 2024 net income was $2.5bn, but in any case, still lower than 2021 net income of $3.1bn. I think this further shows how competitive the crypto landscape is, despite a favorable policy environment and strong creditworthiness, COIN has not been able to capitalize on the trend and achieve meaningful growth in the past few years. Risks to bearish thesis With the passage of pro-crypto legislation, perhaps COIN can capitalize on this wave of interest and achieve further growth to sustain its market cap. It’s possible, but I just don’t see it as very likely. Conclusion I think COIN is probably a sell at these prices, or at the very least, definitely not a buy. The best times to buy crypto in the past few years (and also stocks) were when the sky seemed to be falling and markets were panicking over this or that, not when there’s glowing media attention and eye-boggling valuations. Again, I would not recommend shorting. With all this favorable coverage of crypto, who knows how long this train will run, and I don’t view the risks from shorting as worth it, but I do not view COIN as providing a good potential reward for the risks at these prices.
