No retail investor has accounts directly with the NYSE. Coinbase directly holds the customer relationship and if more government regulation comes down on crypto it will be a better moat for them against competitors.
I think Coinbase may still be overvalued but don't think it is directly comparable to NYSE or other major exchanges.
> I think Coinbase may still be overvalued but don't think it is directly comparable to NYSE or other major exchanges.
I would agree; Coinbase is competing against traditional brokerages and fintech (PayPal, Cash app), who can run their own nodes and key/wallet infra (as the network is the global exchange). Traditional brokerages can even identity proof their customers IRL with their branches and provide an appropriate level of customer service.
Alternatively, it would be somewhat humorous if Coinbase becomes the DTC and Cede & Co of digital assets (for brokerages who would rather pay and plug in vs build their own custody systems). What is old is new again.
«No retail investor has accounts directly with the NYSE»
That's a good point. So a fairer comparison would be to compare Coinbase to the market cap of NYSE ($66B) + a stock broker who has roughly the same userbase as Coinbase. For example Schwab ($127B) has about half as many accounts as Coinbase. So NYSE+Schwab = $193B. Suddenly Coinbase valued at $100B while having twice as many accounts and trading fees per dollar transacted ten-fold higher than NYSE+Schwab seems like a bargain... !
Why stop there? Let's add in Visa too. If we're gonna add Visa, let's add Mastercard. What about banks though? Maybe we add in JP Morgan?
If Coinbase has network effects, they're incredibly weak. I'll drop my Coinbase account tomorrow if I find a cheaper, safe place to buy coins. Schwab on the other hand has inarguably the best checking account out there, incredible customer service, and a great brokerage.
Coinbase is in a race to the bottom and they're gonna get smashed against the floor by established, defensible financial services. Grandma ain't making a Coinbase checking account. That's my thinking anyways.
This is a very simple understanding of economics that's ~100 years outdated. Most of the world's largest companies sell goods and services with relatively inelastic demand and/or significant barriers to market entry. What IP does Coinbase have that makes their service/good inelastic? Tomorrow when all coins are supported on Robinhood, Cash app, and Venmo, why use Coinbase? COIN investors haven't given me a good answer here. It just comes off delusional to me.
> They have 56 million verified user accounts.
This is a deceptive number. Coinbase has ~6M monthly active users at a time when crypto grew in value 10x. Average account duration is, I'm sure, very low. Schwab has ~30M active brokerage accounts. These are actual, comparable numbers. 56M is pretty much anyone that made an account with a linked email, no?
I think Coinbase may still be overvalued but don't think it is directly comparable to NYSE or other major exchanges.