Coinbase Loss Has Silver Linings, Benchmark's Palmer Says

Summary

Mark Palmer, senior equity research analyst at The Benchmark Company, discusses Coinbase's fourth-quarter loss on Bloomberg The Close. He says the soft results were expected given visible spot trading volumes, but points to silver linings in institutional revenue, stablecoin revenue, and diversification. He also argues Coinbase's underlying business value is less crypto-correlated than its stock and sees Base layer-2 monetization as a potential growth driver.

• Coinbase's Q4 loss was not surprising given the crypto slump and transparent spot volumes.
• Institutional platform revenue rose 37% q/q, driven by crypto derivatives and the Deribit acquisition.
• Stablecoin revenue rose 3% sequentially, helped by USDC float economics.
• Coinbase is diversifying into equities and prediction markets to reduce retail trading reliance.
• Palmer says Coinbase's stock is crypto-correlated, but underlying business value is less so.
• Base layer-2 monetization is seen as a potential future growth driver.