Why am I buying my position when it is already up around 200%? There are several points for me:
1. my personal price target for Bitcoin is in the range of USD 120-150 thousand for 2025. the rise in Bitcoin is currently flattening out temporarily.
2. a general increase in the crypto market cap in the new year, not only through Bitcoin but also through an altcoin rally, can drive up Coinbase's crypto portfolio as well as the portfolios of users. An increase in the Coinbase portfolio leads to higher earnings and thus to higher EPS, as unrealized gains are included in the income statement in accordance with US GAAP regulations. In addition, a sale by users results in higher fees due to the volume, not as a percentage but in absolute terms.
3 The Coinbase app was temporarily in first place among financial apps between 20.11 and 12.12 and in the top 5 for the entire period. For me, this indicates a return of retail trading as we knew it from 2021. This trend could of course accelerate next year. Higher transaction volumes and higher user numbers will lead to more revenue, especially if they also opt for services such as Coinbase One or Advanced Trading.
4 Coinbase launched the COIN50 crypto index this year. If next year, after Gary Gensler, we see an SEC that gives more freedom to the crypto sector, then new funds on cryptocurrencies could use this index, which will benefit Coinbase through fees.
5 An earnings beat in the next quarter could well be possible, as the crypto market has grown massively during this period, and with it Coinbase's portfolio.
6) The SEC proceedings against Coinbase are likely to remain in the discovery phase until the second half of 2025. Accordingly, a worst-case scenario here does not overlap with a probable next run up in the crypto market.
These are my thoughts on Coinbase at the moment. I remain bullish for now, but I will certainly take some profits until June, depending on how the market and prices behave. I am not considering selling the full position at any point.