Coinbase: The Future of Finance (New 12-Month Price Target $500)
- LaFoy O. Thomas III, Esq.
- Mar 21
- 4 min read
Thomas Third Capital
Investment Research Report: Coinbase (COIN)
March 20, 2025
Summary and Investment Thesis
Coinbase (NASDAQ: COIN) is not just a leader in cryptocurrency trading; it is one of the most strategically important financial infrastructure companies in the world. With a dominant presence in both retail and institutional crypto markets, an expanding suite of blockchain-based services, and a rapidly growing revenue base, Coinbase is poised to capitalize on the continued mainstream adoption of digital assets.
President Trump has made it clear that his administration is committed to making the United States the global leader in cryptocurrency. Regulatory clarity will provide the necessary framework for mass adoption, and Coinbase, as the most trusted and regulated crypto exchange in the U.S., is the biggest beneficiary. From stablecoins to institutional staking, from Ethereum Layer 2 scaling solutions to decentralized applications, Coinbase is at the forefront of web3 innovation.
We at Thomas Third Capital maintain a 12-month price target of $500 and a 24-month price target of $600 for COIN, representing an extraordinary upside from its current level of $190.38. We believe that Wall Street’s revenue and earnings projections are significantly underestimating the company’s growth potential, particularly in the expansion of crypto trading, Ethereum Layer 2 Base, Coinbase Cloud, and its venture investments.We also expect a satisfying rally in Bitcoin and other crypto assets, which, because of mark-to-market accounting, will have a material impact on COIN's earnings in 2025 and 2026.
Financial Performance and Valuation
Revenue Growth: Coinbase’s revenue grew 111% YoY in 2024 to $6.6 billion. We project revenue growth of at least 40% in 2025 to $9.2 billion, significantly above Wall Street’s 24% estimate.
Profitability: Net income reached $2.6 billion in 2024, with a 39% net profit margin. With a gross margin of 75%, Coinbase has strong operational efficiency.
Earnings Projections:
2025 EPS: We project $12.50 per share, well above Wall Street’s $7.88 estimate.
2026 EPS: We estimate $17.00 per share, significantly higher than Wall Street’s $8.23 estimate.
Valuation:
P/E Ratio: 20 (current), 22 (forward)
Price-to-Sales Ratio: 8
PEG Ratio: 0.27 (indicating exceptional value for a high-growth company)
Balance Sheet Strength: Coinbase holds $9.5 billion in cash and cash equivalents, ensuring financial stability and flexibility for future growth initiatives.
Technical Analysis
21-day moving average: $205.44
50-day moving average: $247.72
200-day moving average: $233.87 The stock is currently below key moving averages, indicating a potential near-term accumulation opportunity before a significant upward move.
Key Growth Drivers and Opportunities
Retail and Institutional Crypto Trading
Retail trading remains the core business, benefiting from increased crypto adoption.
Institutional participation is rising, with ETFs and hedge funds embracing Bitcoin and other digital assets.
Base (Ethereum Layer 2)
Built on Ethereum to provide scalability, security, and lower fees.
Base has rapidly gained traction in the web3 developer community.
Revenue generated from sequencer fees for processing transactions.
Bitcoin-backed loans recently launched on Base, further expanding its utility.
Coinbase Cloud
Formerly Bison Trails, this business provides blockchain infrastructure tools, APIs, and SDKs.
Supports developers in building dApps for staking, trading, and decentralized finance (DeFi).
A critical component of Coinbase’s long-term web3 strategy.
USDC Stablecoin Growth
$59.4 billion market cap, up 79% in 2024.
Coinbase earns interest income from USDC reserves invested in U.S. Treasuries.
$910 million in revenue from USDC in 2024, with upside as stablecoin adoption grows.
Coinbase Ventures
Over 500 crypto and web3 investments, with 400+ portfolio companies.
Notable investments: OpenSea (NFT marketplace) and Farcaster (web3 social network).
COO Emilie Choi has stated that Coinbase Ventures could represent a $1 trillion opportunity in the long term.
Wallets and Staking
Coinbase Wallet adoption continues to grow as more users shift toward self-custody solutions.
Staking services provide recurring revenue from proof-of-stake networks such as Ethereum.
Regulatory Tailwinds and the Future of Crypto
Trump Administration's Pro-Crypto Stance: Once the U.S. moves to become the global leader in crypto regulation, Coinbase will be the primary beneficiary due to its first-mover advantage and regulatory compliance. President Trump also promised a national Bitcoin reserve.
Institutional and Government Adoption: Stablecoin regulation and a clearer framework for digital assets will accelerate institutional adoption, driving more capital into the space.
Mainstream Acceptance of Crypto: The rise of Bitcoin ETFs and increasing integration of blockchain technology into traditional finance will expand Coinbase’s total addressable market.
Conclusion: A Generational Investment Opportunity
Coinbase is one of the most important companies in the world, playing a pivotal role in the evolution of global finance. While Wall Street remains conservative in its projections, we at Thomas Third Capital see an opportunity that is vastly undervalued given the company’s positioning, regulatory tailwinds, and multi-faceted growth strategy.
With a 12-month target of $500 and a 24-month target of $600, we believe Coinbase represents a generational investment opportunity in digital assets and web3 infrastructure.
Recommendation: Do Your Own Research
12-Month Price Target: $500
24-Month Price Target: $600
Disclaimer: I/We own shares of Coinbase.
For financial literacy and the ability to find and analyze great investments, please read my books Generational Wealth: Beginner’s Business & Investing Guide and 1,000% Returns: Taking Advantage of the Stock Market’s Gross Incompetence. Both are amazing and are available on Amazon.com.
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