Hayden Capital believes Coinbase’s revenues could approach $50 billion by 2025.
An investment firm has revealed that it believes Coinbase’s revenues could approach $50 billion by 2025.
In a note to investors, Hayden Capital said:
“We are long the crypto economy and believe Coinbase is in the best position to capture this growth.”
Analysts argued that the crypto economy is here to stay and isn’t a fad.
Although Coinbase charges higher transaction fees than rivals, Hayden Capital believes that the exchange will be “able to hold on to these prices” — rejecting fears that a price war will soon break out between trading platforms.
The report’s authors said that Coinbase’s easy-to-use interface, wide range of tokens, 54% market share and brand recognition — as well as the fact that it has never been hacked — help to justify this premium.
Shrugging off regulatory concerns, Hayden Capital added:
“On SEC clampdowns, we do recognize this as a risk to the overall growth of the crypto ecosystem. However, the market seems to be misunderstanding that these regulations are mostly on potential new products or services (i.e. the future growth of Coinbase), or on other parts of the crypto ecosystem that do not affect Coinbase’s main business significantly.”
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Challenges Ahead
In the report, Hayden Capital concedes that it can be difficult to make long-term financial forecasts when it comes to a company like Coinbase — and that’s because its revenues are tied to volatile crypto prices.
Indeed, we’ve seen the impact that this can have, with Robinhood announcing last week that its crypto-related revenues fell by a whopping 78% in the third quarter.
But continuing to strike a bullish note, the investment firm said things are looking up, adding:
“We adopt a longer-term view and anchor on the belief the crypto asset base will be significantly larger in five years.”
Another burning question is also addressed in the report: why don’t Coinbase users switch over to Coinbase Pro, where fees are much lower?
Hayden Capital says there are several reasons for this: Staking rewards cannot be earned through Pro, the user interface on Coinbase is simpler, information presented on the main app is catered to casual users, and a learn to earn program enables new investors to earn tokens by watching videos.
Other nuggets in the report include:
“Institutional volume is currently double that of retail volume but contributes just over 5% of trading revenues due to the dramatically lower take-rates. We think institutional business is important nonetheless because its growth could grow exponentially, and new forms of monetization could come from added services over time.”
