Coinbase Soars as Crypto Goes Mainstream, But Relies on Trading Volume Over Coin Prices

Coinbase's stock price has skyrocketed, but its valuation is based on rising crypto trading volumes, not volatile digital asset prices.

Coinbase makes money from fees and services related to crypto trading, similar to a traditional bank. Its success is tied to crypto popularity, not specific coin prices.

This crypto boom is different due to the arrival of Bitcoin spot ETFs which rely on Coinbase for trading and custody.

These ETFs bring new crypto investors and trading volumes to Coinbase while making Bitcoin investing mainstream.

Coinbase has a history of exceeding earnings estimates. Its valuation looks high now but could prove very low if growth continues through this crypto boom.