Journalist
Posted:
- Coinbase’s role as the dominant manager of spot Bitcoin ETF applications was a major factor.
- The problems at the end of Binance benefited Coinbase.
There was an uproar in the Binance universe following the indictment of former CEO Changpeng Zhao and subsequent departure last week.
However, when things played out in a competitive market, a completely opposite effect was observed on the second largest crypto exchange Coinbase [COIN].
The company’s shares, listed on the NASDAQ stock exchange, have risen 25% since the Binance news broke, AMBCrypto noted via Google Finance.
Until the last close, the $30 billion valued crypto stock was trading at $119.77, its highest level since April 2022, and more than tripled in value year-to-date (YTD).
Source: Google Finance
Coinbase pigs are in the spotlight via custody services
While Binance’s troubles were indeed a major catalyst for Coinbase stock’s rebound, the Web3 company’s own performance in 2023 cannot be ignored. Perhaps the biggest of them all: its role as the dominant custodian in almost all Bitcoin ETF applications.
TradFi giants including Blackrock, ARK and Franklin Templeton chose Coinbase’s institutional custody services to store billions of Bitcoins. These assets, as we know, would help align the ETF shares with the prevailing price of Bitcoin.
Will Coinbase’s fortunes soar?
A pro-Coinbase user on X, using the pseudonym RoninBullpredicted huge profit potential for Coinbase through its ETF custody services.
Coinbase is the custodian of 9/12 BTC ETFs. Let’s say half of the BTC ends up in ETFs. At 100k, BTC has a market cap of 2T. That’s ~1T assets in custody by $COIN. They charge 10 basis points per month, which equates to 1 billion in profit per month. That alone equals the same annual profit as $TSLA pic.twitter.com/MMK13Dswc1
— RoninBull (@RoninBul) November 28, 2023
The user assumes that almost half of all Bitcoins in circulation will be moved to Coinbase once all spot ETFs are functional. They then made a bold price prediction of $100,000 for BTC.
At this rate, nearly $11 trillion in assets would be held by Coinbase. Citing Coinbase’s own custodial fee structure, RoninBull projected a profit of nearly a billion per month for the company.
Prominent voices back COIN
Many users were not convinced by the numbers. However, they somewhat agreed with the idea behind the hypothesis.
Leading attorney and keen observer of crypto-related developments in the US John E. Deaton quoted RoninBull’s post and said“It’s hard not to be optimistic MINT.”
While scrolling through Deaton’s X-posts, AMBCrypto found more recommendations for Coinbase. “I think it’s a screaming buy under $150,” he said in response to a crypto investor’s bet that COIN will reach $200.