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Despite Hitting New Lows, Coinbase Has a Promising Future

The growing interest and awareness in cryptocurrencies has led to a rise in the demand of popular crypto-assets like Bitcoin (BTC-USD). The cryptocurrency industry is down along with the tech sector and the biggest U.S. cryptocurrency brokera…

The growing interest and awareness in cryptocurrencies has led to a rise in the demand of popular crypto-assets like Bitcoin (BTC-USD). The cryptocurrency industry is down along with the tech sector and the biggest U.S. cryptocurrency brokerage, Coinbase Global (NASDAQ:COIN) stock had to bear the brunt of the decline in the value of crypto assets.

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Coinbase stock tends to mirror the leading crypto assets and it has been noticed that whenever Bitcoin falls, COIN stock falls too.

Since the company generates income from the transaction fees, its success is dependent on crypto prices and how they perform in the given period.

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Closer Look At COIN Stock

Coinbase enjoyed a wonderful ride over the past year. Whenever Bitcoin hit a new high, the stock soared. The stock was trading for $230 in June 2021 and crossed $300 in October. It consistently grew and went as high as $357 in November.

However, COIN stock has shown a downward trend since then. Over the past two months, the stock fell from $315 less than $200. At this writing, it trades at nearly $209. It is down 9% over the past month and 39% in the past three months.

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Right Partnerships Can Help Business Growth

Coinbase is partnering with the right companies to maintain its domination in the industry. It partnered with Mastercard (NYSE:MA) recently to facilitate the purchase and sale of non-fungible tokens. The company had already launched a peer-to-peer NFT exchange in October and this partnership will make it easier for consumers to purchase NFTs through Mastercard debit and credit cards.

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Further, the company also added Tobias Lutke, Shopify (NYSE:SHOP) CEO, to its board of directors. It will be interesting to see how the partnership turns out and what it does for both the companies.

Despite being public for less than a year, Coinbase had attracted several users to the platform and is gaining confidence from the investors. The plunge in COIN stock was likely due to several market-wide factors, but the company has consistently worked to make the right partnerships and strengthen its position in the industry.

Number Of Assets on the Platform Is Rising

Coinbase is one of the oldest crypto exchanges and it has built a solid reputation for the constant expansion in terms of the available assets on the platform. It enjoys a first-mover advantage and has many assets as compared to its rivals.

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The company ended the third quarter with a total of 103 assets for trading and 158 assets for custody on its platform. This ensures that users have a broad range of assets to choose from and less dependence on Bitcoin. As new assets gain popularity, users will come to the platform to trade them.

It also has integrations with fiat currencies in place across more than 90 countries. With each new asset on the platform, the company ensures that it has passed the regulatory, legal, and compliance standards.

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I believe Coinbase will continue to add new assets to the platform with each quarter and this is a sign of a healthy company. With each new asset, there is a chance to attract new users and make revenue.

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What to do With Coinbase Stock

COIN stock may not be at its peak now but it is not completely washed out. The company certainly has the potential to bounce back. It will take some time to rebound due to several market-related factors.

Coinbase is a strong company with healthy fundamentals and the fourth-quarter results on Feb. 24 could give us a better insight into the numbers. However, if you do not want to bet on crypto assets, you can consider buying COIN stock in the dip.

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On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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