Coinbase Global: Buy This Correction On Long-Term Prospects

Summary Coinbase Global remains a buy despite a 57% drop, supported by strong cash growth and a robust balance sheet. COIN has diversified revenue streams—custody, stablecoins, staking, subscriptions—cushioning earnings during crypto downturns and positioning for long-term digital asset ecosystem growth. Trading volume is increasingly institutional, now 81% of trading volume dollars, while average revenue per user trends higher, and cash reserves have nearly doubled in two years. COIN trades at a discounted 14x P/E with a 43% net income margin; long-term prospects hinge on stablecoin adoption, tokenization, and transactional growth. The crypto world has been getting slammed since early in Q4 last year. Coinbase Global, Inc. ( COIN ) is no exception and has now dropped about 57% over four months. I had given the stock a buy rating in late October before their Q3 earnings. Even with a relatively strong report, the stock has tanked alongside the majority of all crypto investments. Seeking Alpha COIN is one of the leading cryptocurrency exchanges and digital asset platforms in the world, offering retail and institutional investors the ability to buy, sell, and custody a wide range of cryptocurrencies. Beyond trading, COIN is growing its platform, providing solutions for stablecoins, staking, and institutional-grade custody, positioning itself as a comprehensive hub in the rapidly evolving digital asset ecosystem. I think heavily weighing short-term trends in this space is not the greatest decision and I still believe the company and industry's long-haul growth prospects are still intact. Market fluctuations are inevitable in this field, and while it takes patience and a gut for the volatility, I still have COIN as a buy, as Q4 earnings are set to be released this week. The company has demonstrated consistent cash growth and maintains a strong balance sheet, which provides flexibility to capitalize on industry expansion, invest in new technologies, and tokenization in the constantly evolving crypto landscape. Transactionally, numbers are trudging along just fine, and amongst peers, COIN is in a good regulatory spot for global growth. Crypto Freefall The majority of crypto assets have been spiraling down for a few months. Rising crypto prices typically drive higher trading volumes, greater retail engagement, and increased institutional activity, all of which expand Coinbase’s transaction revenue and improve operating leverage. Of course, in times of depreciating crypto prices, the opposite occurs. However, COIN has done a nice job in recent times of diversifying its business model, spanning custody, stablecoins, staking, and subscriptions, all of which help cushion earnings and cash flow during the darker days. I must still point out that COIN has actually had larger swings than Bitcoin USD (BTC-USD) itself. For example, from the quick uptick in early 2024, BTC climbed 4.25x, while COIN scaled 5.25x. On the other hand, both the price drop in early 2025 and the one we are currently witnessing, COIN has seen the worst of it. In the current correction, COIN is down near 60%, compared to BTC, which is closer to 40% lower. This is certainly a risk with this investment and is why it is not meant for the lighthearted. It’s not uncommon for crypto investors to take their profits after a large rise, which we saw last summer. There are fewer buy-and-hold investors in this space, and along with macroeconomic and global regulatory uncertainty, crypto is in a rocky and declining period. From my perspective, each time cryptocurrencies taper off like this, it appears that a strong bull market shortly follows, and I think COIN could rise sharply based on its volume and balance sheet strength. Volume & Cash Strong Stock Story Trading and transactional volume are both higher YOY. A key piece here to keep an eye on is that institutional trading, while also still volatile, seems to keep gaining traction each year, now accounting for around 81% of the firm's trading volume dollars. Institutions are way volume can scale quickly, so keep an eye on this trend in the Q4 report this week, even though we can safely assume it will be lower QoQ. With revenues so inconsistent in this space, an important metric is average revenue per user ((ARPU)), which tracks how much they earn in fees from each user. As seen above, the trends from 2022 are consistently higher, a great sign that transactional users and monetization per user are both on a positive trend. Another piece I like is that through all the swings, cash and equivalents have steadily climbed and are almost double where they were two years ago, now just shy of $9.8 billion from last quarter. At that time in Q3 2023, expenses had also outpaced sales, which has substantially flipped now, with revenue 65% higher than operating expenses last quarter. Widen Your Scope Q4 earnings are expected to arrive with earnings at $1.15 per share and revenue at $1.85 billion. These would be 66% and 18% down YoY, respectively. Based on the clear drop in crypto assets in recent months, investors should fully anticipate a drop as analysts predict. I think that if COIN manages to beat expectations or is even close, it could release some strong investor reaction. It has been a strong bull run, and while it feels like the tides need to turn at some point, a positive managerial tone in this report could go a long way. At the end of the day, I don’t expect even an earnings win to necessarily turn the stock around, as its dependence on overall crypto asset prices seems to have more relevance at the moment. I’m not going to sit here and speculate when BTC and other cryptos are going to rise again; I am more concerned with where COIN sits in the long run of the digital asset space. COIN is a leader among crypto asset platforms from a regulation perspective, including the passage of stablecoin-specific legislation such as the GENIUS Act passed in 2025, helping this progress. As I noted in my prior article, stablecoins have emerged as a frontrunner for the future of crypto. USDC, the most commonly known stablecoin, reached an all-time high market cap in Q3, growing by $12 billion just QoQ. At the moment, COIN is a stablecoin supporter and is taking steps toward providing a full-stack stablecoin payments platform with the integration of payment APIs, B2B payments, and embedded wallets. Right now, traditional centralized institutions are still the primary source for financial activity. Assets are slowly moving more and more “on-chain” , meaning enforced by “smart contracts” or blockchain. COIN is making moves to tokenize the financial ecosystem with hopes to become a one-stop shop for all financial infrastructure of the future. Conclusion WSJ COIN is valued at a huge discount compared to six months ago, now trading at a P/E of 14x. Profitability remains a strength with a net income margin of 43%, close to double the sector median. If you are a believer in the growth of a digital asset ecosystem, COIN is an intriguing investment that could generate massive growth years down the road. I don’t necessarily see any huge movement in the next year or two, but based on the correction the stock is seeing, I see the moment as a buying opportunity. Look for Q4 numbers to come in lower this week, but importantly, keep an eye on the long-term prospects, which are continued growth in stablecoin progression, management notes on steps toward tokenization, and steady movement in transactional numbers and cash position. I have COIN as a buy regardless of Q4 earnings this week.