Coinbase Faces Price Slump Amid Crypto Market Volatility; Analyst Highlights Hidden Potential

Coinbase (COIN) stock has plunged 16% in the past five days, despite crypto analyst Will Clemente suggesting that investors may be missing a potential buying opportunity. Clemente believes traditional investors still view Coinbase solely as an exchange, overlooking its transformation into a "crypto super app" with significant revenue potential from its Ethereum layer-2 network, Base. At the time of writing, COIN trades at $218.08, down approximately 16% in the past five days.

Coinbase Faces Market Volatility Amid Broader Crypto Turmoil, Analyst Highlights Untapped Potential

Amidst the recent fluctuations in the crypto and stock markets, Coinbase (COIN) shares have experienced a significant decline, plunging 16% over the past five trading days. However, one prominent analyst, Will Clemente, believes that investors may be overlooking the company's untapped potential.

In a recent episode of the Unchained Crypto podcast, Clemente drew parallels between Coinbase and Tesla's position in the public markets approximately five years ago. He suggested that traditional investors tend to perceive Coinbase primarily as an exchange, despite the company's active business restructuring over the past year.

"Over the course of the bear market, they've made several strategic adjustments to transform themselves into what I term a 'crypto super app,'" Clemente remarked.

He specifically highlighted the progress of Coinbase's Ethereum layer-2 network, Base, which has accumulated a total value locked (TVL) of $5.35 billion and processes over 30.81 transactions per second.

"Base has produced $30 million in top-line revenue for Coinbase in the past 30 days solely through sequencer fees, which equates to an annualized revenue of $360 million," Clemente explained. He emphasized that traditional investors may be underestimating the significance of this on-chain activity.

"The market is unaware of Base and its potential. Consequently, they are not fully comprehending the potential revenue streams Coinbase could realize from the growing activity on the network and the sequencer fees associated with it," Clemente added.

As of the time of writing, COIN is trading at $218.08, marking a decline of approximately 16% over the past five days. Over the same period, the S&P 500 has retreated by 3.12%, while Bitcoin (BTC) has depreciated by around 4.67%.

Meanwhile, expectations of further market declines persist due to escalating geopolitical tensions in the Middle East following reports of explosions at Isfahan airport in central Iran.

Amidst the prevailing market volatility, Cathie Wood's ARK Invest remains actively selling COIN shares. On April 15, ARK reportedly sold 3,689 COIN shares valued at roughly $824,000. This action follows ARK's previous divestment of a substantial number of Coinbase shares in March, when the stock was experiencing a notable year-to-date increase of approximately 54%.