Amidst a thriving crypto market, Coinbase Global (COIN) has seen its stock surge an astounding 375% this year, and 120% in the past 3 months alone.
The stock fell off a cliff back in 2022 after reaching a high of $342/share. It fell to a low of $33/share just about a year ago. It’s been rallying back since then, and now sits at $163/share. This spike is largely attributed to the increasing interest in cryptocurrencies and the subsequent boost in trading volumes on the Coinbase platform.
However, it’s the company’s strategic shift towards diversifying its core business that’s catching the eye of Wall Street and retail investors alike. This is where Project Diamond and the conversation of RWA tokenization become very compelling.
Real World Asset tokenization is the idea that tangible assets like stocks and bonds can be transformed into blockchain-tradable digital tokens.
This innovative shift is projected to tap into a $10 trillion market by 2030. It could revolutionize traditional trading with benefits like 24/7 transactions, reduced costs, and increased transparency. Companies like BlackRock Inc. are taking note, and you should too.
This is particularly important for Coinbase, as it could be a way for the company to branch outside of traditional crypto trading. The platform has already created its own blockchain to assist in the creation of RWA tokenization. It’s known as “Base”.
The idea is that any company that wants to create its own RWA token would come to a trusted platform like Coinbase to do it.
While this opportunity is certainly exciting, it will be a while before Coinbase is actually able to capitalize on it. There will be no shortage of regulatory hurdles to jump through along the way, along with the challenge of getting traditional companies to buy into the increasingly digital and decentralized financial world.
That being said, the long-term growth prospects for COIN cannot be ignored. So, should you buy this stock and hop aboard the hype train? Not so fast – we’ve found 3 things through the VectorVest stock analyzer that you need to consider before doing anything else.
Despite Excellent Timing and Fair Safety, COIN Has Very Poor Upside Potential
VectorVest simplifies your trading strategy through a proprietary stock-rating system. It tells you what to buy, when to buy it, and when to sell it - saving you time and stress while empowering you to win more trades.
The system is comprised of 3 ratings: relative value (RV), relative safety (RS), and relative timing (RT). Each sits on its own scale of 0.00-2.00 with 1.00 being the average, allowing for quick and easy interpretation.
You’re even offered a buy, sell, or hold recommendation based on the overall VST rating for any given stock, at any given time. As for COIN, here’s what we’ve uncovered:
- Very Poor Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (based on a 3-year price projection) to AAA corporate bond rates and risk. COIN has a very poor RV rating of 0.14 after skyrocketing in price over the past year. It’s overvalued right now, with a current value of just $21.
- Fair Safety: The RS rating is an indicator of risk. It’s calculated through an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. As for COIN, the RS rating of 0.88 is a bit below the average - but deemed fair nonetheless.
- Excellent Timing: This is where things get interesting, as the RT rating of 1.97 is about as good as it could possibly get for COIN, reflecting its performance over the past year. The rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year.
The overall VST rating of 1.32 is very good for COIN - but it’s not quite enough to earn the stock a buy. It’s currently rated a HOLD in the VectorVest system. Learn more about this opportunity with a free stock analysis today!
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VectorVest advocates buying safe, undervalued stocks, rising in price. COIN has been skyrocketing over the past year, and the long-term growth prospects look promising with the innovation of RWA tokenization. The stock may have poor upside potential after an explosion in price, but it’s fairly safe and has excellent timing.
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