Coinbase (COIN) Stock Could Soar in 2025 as It Capitalizes on New Revenue Streams and a Potential Bull Market

Just a year ago, Coinbase Global (NASDAQ: COIN) was trading around $75 per share. Fast-forward to today, and it has seen a major surge, climbing to roughly $210.

Coinbase (NASDAQ:COIN) stock has been on a wild ride since its direct listing in 2021. The cryptocurrency exchange went public at $250 per share, and it quickly soared to nearly $400. But as crypto prices crashed and broader market conditions worsened, Coinbase stock took a hit, eventually bottoming out at around $30 in early 2023.

Since then, Coinbase stock has staged a remarkable comeback, climbing to roughly $210 as of this writing. This marks a gain of more than 600% from its lows and a 20% gain year to date. But despite this impressive rally, some analysts and investors believe that Coinbase stock still has plenty of room to run.

Here are three reasons why Coinbase stock could soar even higher in 2025.

1. Diversifying revenue streams beyond transaction fees

If you've been following my coverage (or really, any analysis of Coinbase), you'll know that the company has made substantial strides in diversifying its revenue model over the past few years, a major factor behind its impressive stock performance.

Traditionally, Coinbase generated the bulk of its income through transaction fees, a model highly reliant on trading volume and vulnerable to market swings. Recognizing the need for stability, Coinbase began to build additional revenue sources, notably stablecoin revenue, which is now its second-most lucrative segment.

Coinbase's stablecoin business has thrived over the past two years, benefiting from its partnership with Circle, the issuer of USD Coin. With higher interest rates, Coinbase has leveraged funds from USDC buyers to invest in Treasury bills, which yield better returns during rate hikes.

This strategy paid off, with stablecoin revenue hitting a record $250 million in Q3 2024. However, this stream may take a hit as the Federal Reserve performs a rate-cutting cycle over the next year.

But this is where Coinbase's diversified revenue model will begin to shine. While a reduction in rates might dampen the income generated from stablecoins, it could simultaneously spark a new crypto bull market.

As rates fall, the cost of borrowing decreases, and liquidity in the economy tends to increase. Historically, a low-interest rate environment encourages risk appetite, which often leads to more capital flowing into riskier assets like cryptocurrencies (as seen in the bull market of 2021, when rates were at nearly 0%).

With the market projecting rate cuts to reach their peak by mid-2025, Coinbase's other revenue streams (such as transaction fees, blockchain rewards, and custodial services), which correlate closely with cryptocurrency prices and market activity, may begin to see significant growth in the next year.

2. Potential for a crypto bull market

Speaking of bull markets, another factor that could propel Coinbase stock to new heights in 2025 is the possibility of a sustained bull market in the cryptocurrency space.

As we've seen in previous cycles, periods of low interest rates and high liquidity tend to favor crypto assets, which are often viewed as a hedge against inflation and a way to amplify gains in a low-rate environment.

While it's difficult to predict the exact timing or magnitude of a crypto bull market, there are several indicators that suggest it could be brewing. For one, the market has recovered substantially from the lows of 2022, and it's now showing signs of strength and resilience.

Additionally, institutional interest in crypto continues to grow, with major banks, hedge funds, and other traditional financial institutions exploring ways to integrate crypto into their offerings. This level of interest bodes well for the long-term health and growth of the crypto market.

If a crypto bull market does materialize in 2025, Coinbase, as the leading U.S.-based cryptocurrency exchange, stands to benefit immensely. Increased trading activity, rising crypto prices, and higher demand for exchange services would all translate into大幅な収益と利益の拡大 for Coinbase.

3. Exchange volume as a key metric

One metric that can help us assess Coinbase's potential in 2025 is exchange volume. A key measure that helps us gauge the stage of the crypto cycle, exchange volume can be viewed as a proxy for investor interest, and it tends to rise and fall with market cycles.

At the peak of the last bull market, Coinbase processed nearly $550 billion of trading volume in Q4 2021. Today, with the crypto market recovering but still far from the highs of the last cycle, Coinbase's volume sits at around $226 billion. This suggests not only room for growth, but also the potential to exceed previous records if another bull market takes shape, as crypto assets often break past old highs in these cycles.

This potential market swing holds major implications for Coinbase. During the height of the previous bull run, over 90% of Coinbase's revenue came

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