- Crypto analyst Will Clemente believes Coinbase stock (COIN) is undervalued, calling it the biggest “venture-style bet” in public markets since Tesla a few years ago.
- Clemente cites Coinbase’s Ethereum layer-2 network Base, which has a total value locked (TVL) of $53.5 billion and processes over 3 million transactions per second, as a major revenue driver that traditional investors are overlooking.
- Over the last 30 days, Base has generated $30 million in revenue for Coinbase from sequencer fees alone, annualizing to around $360 million.
Coinbase’s stock price has plummeted recently, mirroring broader volatility in crypto and stock markets. However, one analyst believes investors are missing the potential buying opportunity.
Base Layer-2 Network Generating Significant Revenue
According to crypto analyst Will Clemente, traditional investors still view Coinbase as just an exchange. However, Coinbase has made strategic pivots towards becoming a “crypto super app” throughout the bear market.
In particular, Clemente highlighted Coinbase’s Ethereum layer-2 network, Base, which now has $5.35 billion in total value locked and oversees 3,081 transactions per second.
Over the past 30 days, Base has generated $30 million in revenue for Coinbase through sequencer fees. This annualizes to around $360 million per year.
Clemente explained that the street doesn’t understand Base and is not accounting for the significant on-chain activity and potential sequencer fee revenue for Coinbase.
Coinbase Stock Decline Amid Broader Market Volatility
At the time of writing, COIN is trading at $21.808, down almost 16% over the past five days according to Google Finance data.
Over the past 5 days, the S&P 500 is down 3.12% while Bitcoin has declined approximately 4.67%. More downside is expected for both markets as geopolitical tensions rise in the Middle East.
Meanwhile, Cathie Wood’s ARK Invest continues selling its COIN shares amidst the decline. On April 15, ARK sold 3,689 COIN shares worth $824,000. This comes after ARK sold nearly 200,000 COIN shares in March.
Earnings Report Coming Soon
Coinbase is expected to release its Q1 2023 earnings report in the next few weeks. The report should provide more insight into the health of Coinbase’s business.
While short-term price action is negative, Clemente believes the market is underestimating Coinbase’s long-term crypto native revenue potential. He likens Coinbase to the biggest “venture-style bet” in public markets since Tesla.
