:max_bytes(150000):strip_icc()/GettyImages-2223916767-eac9b9914d2d401998507b99abbf168d.jpg "Coinbase Global Wants to Be More Than a Crypto Exchange—Much More")
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Key Takeaways
- Coinbase Global rolled out a slate of new offerings including stock trading, a tokenization platform, prediction markets, and an AI-powered investment advisor.
- Coinbase CFO Alesia Haas said that the company intends to be the “No. 1 financial app” in the next five years.
The largest publicly-traded U.S. crypto exchange just entered the race to build a financial “everything app.”
Coinbase Global (COIN) on Wednesday evening announced a raft of new products and services, including stock trading, prediction markets, a tokenization platform, and an artificial intelligence-powered roboadvisor. “We are building to become the face of the future of finance,” Coinbase CFO Alesia Haas said in an interview with Investopedia, saying its goal in the next five years is to be the No.1 financial app.
A so-called everything app or “super app” has been the holy grail for many companies in retail, social media, dating—and, of course, financial services. Trading platforms including Robinhood (HOOD) and SoFi (SOFI) appear to be converging in the same space, rolling out similar services and products such as banking services, credit cards, and events contracts.
WHY THIS MATTERS TO YOU
Super apps like China’s WeChat or Korea’s KakaoTalk haven’t really arrived in the U.S. If one does, it might resemble those—which users rarely close because if they’re not using them to call or chat with loved ones, they’re using them to shop and pay for things.
Haas said Coinbase’s “primary goal” is to deepen relationships with existing customers; the broader set of offerings could also open up its potential customer base.
“What this will enable us to do is gain more share of wallet from our customers,” Haas said. “So before, I think many of our customers would trade crypto with Coinbase and trade their stocks at another platform, and now we have the opportunity to serve them in more of their trading needs.”
As Coinbase advances in its goal of becoming more than a crypto exchange, its business and stock should be less subject to the swings of coin markets—though it would also move the company to a realm already populated by other large financial services companies.
“This strategy should substantially widen the firm’s addressable markets (both retail and institutional), diversify its product/service range, while helping to mitigate potential future pricing pressure within retail crypto trading,” Deutsche Bank analyst Brian Bedell said in a research note Wednesday.
Bedell initiated coverage of Coinbase with a Buy rating on the stock and a price target of $340, implying upside of almost 40% from Wednesday’s closing price of $244. Of the 12 analysts tracked by Visible Alpha, eight have a buy, or bullish, rating on the stock, and four, a hold, which is effectively a neutral position; the average price target is $380.
