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In a recently published report by Bitwise, the leading crypto index fund manager, a striking comparison has been drawn between Coinbase and Amazon, highlighting a significant yet under-reported aspect of Coinbase’s business \u2014 the Base Layer 2 network. Titled “It\u2019s All About That Base (and Other Thoughts on Coinbase),” the report authored by Matt Hougan and Juan Leon delves deep into the financial and strategic shifts underpinning Coinbase’s latest successes and potential future. Amazon Of Crypto? Bitwise Projects Stellar Future For Coinbase Coinbase’s latest financial results have been a revelation, demonstrating robust growth and operational efficiency. The company reported $1.6 billion in net revenue, marking a 116% increase year-over-year, significantly surpassing Wall Street\u2019s expectation of $1.36 billion. Profits were equally impressive, reaching $1.2 billion with total cash reserves swelling to $7.1 billion. Each of Coinbase’s business lines showed notable growth: consumer trading revenue rose by 93%, institutional trading by 105%, stablecoin revenue by 15%, blockchain rewards by 59%, and custodial services by 64%. Related Reading: Coinbase Sees Largest USDC Inflow Ever, What This Could Mean For Bitcoin Despite these strong numbers, the stock has trended downwards, suggesting that the market may not fully appreciate the depth of the company’s strengths. However, Bitwise highlights a less conspicuous but potentially transformative element of Coinbase\u2019s portfolio: the Base Layer 2 network. Launched in August atop Ethereum, Base aims to enhance the blockchain\u2019s throughput while lowering costs. It operates similarly to a bar tab, aggregating transactions and settling them in batches, thereby reducing transaction costs to under $0.01 and speeding up processing times to less than one second. The adoption rate of Base has been staggering. The network saw a 74% increase in transactions quarter-over-quarter in the first quarter, with a 40% increase in April alone compared to the entire first quarter. The exponential growth in the number of developers using Base, which increased eightfold, underscores the network’s rising significance and the broader industry’s interest. From a financial perspective, Base has been lucrative for Coinbase. In the first quarter alone, the network generated $27.4 million in transaction fees, of which Coinbase retained $15.5 million. This high-margin revenue stream continued into April, adding another $11 million to Coinbase\u2019s profits. Given these trends, Bitwise predicts that Base could soon be contributing $10 million to $20 million in monthly profits to Coinbase. The analogy with Amazon is rooted in the transformation potential of Base. Just as Amazon evolved from a simple online bookstore into a retail giant and later a dominant force in cloud computing through Amazon Web Services (AWS), Coinbase could similarly evolve from a crypto brokerage to a fundamental infrastructure provider for the crypto industry. Related Reading: Bitcoin Coinbase Premium Returns To Neutral: Buying Push Already Over? This shift could redefine Coinbase’s role and impact within the market, positioning it as a central infrastructure entity in the crypto ecosystem, akin to how AWS underpins much of today’s web services. The report concludes by reflecting on the significance of Base for Coinbase\u2019s strategic direction. \u201c[T]he early returns on Base suggest that Coinbase could end up becoming something even greater: a core infrastructure provider to the crypto ecosystem. And that would be a very big deal indeed.\u201d COIN Price Analysis Analyzing the technical landscape, the price of Coinbase (COIN) currently faces a pivotal moment. After dropping to $211.20 (as of press time), down 11.4% from a weekly high of $235.79, the stock is testing significant resistance and support levels that could dictate its short-term trajectory. The Fibonacci retracement tool, applied from a low of $31.62 to a high of $429.52, identifies critical price points. Presently, COIN is contending with the $230.57 level (0.5 Fibonacci level), which acts as the primary resistance. The 20-week Exponential Moving Average (EMA) provides crucial support at $199.35, with the stock recently bouncing off this level. The Relative Strength Index (RSI) stands at 56.10, suggesting a balanced dynamic between buying and selling pressures, with a slight tilt towards buying. The recent price behavior, characterized by a candlestick with a small body and longer wicks, reflects the ongoing uncertainty and cautious sentiment among traders. Featured image from Nasdaq, chart from TradingView.com<\/p>\n","protected":false},"author":571,"featured_media":607157,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3],"tags":[14917,1379,92252,1393,91662,14690],"class_list":["post-607153","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bitwise","tag-coin","tag-coin-price","tag-coinbase","tag-coinbase-stock","tag-crypto-news"],"acf":[],"yoast_head":"\n
Bitwise Heralds Coinbase (COIN) As 'Next Amazon': Price Targets<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n