According to Will Clemente, co-founder of Reflexivity Research, Coinbase shares could be seen as an ‘index play’ by traditional finance firms seeking broad exposure to the cryptocurrency sector. During a December 21 Space hosted by Bitcoin bull Anthony Pompliano on X (formerly Twitter), Clemente expressed his perspective, stating, ‘I think TradFi will probably view COIN [Coinbase] as kind of an index play on crypto because they have so many different kinds of verticals now.’
TradFi could view Coinbase as its gateway for an ‘index play on crypto’
He went on to explain, ‘Someone might come in the space and say, I bought some Bitcoin, I don’t really know which of these other assets to pick; Coinbase feels like a pretty safe kind of index style play.’ Meanwhile, Matt Hougan, Chief Investment Officer of cryptocurrency asset manager Bitwise, also participating in the X Space, shared optimism about the future prospects of the exchange.
Consider Coinbase as the ‘index play on crypto’ for Traditional Finance, according to some experts
Bitwise manages the Bitwise Crypto Industry Innovators exchange-traded fund (ETF), which includes holdings in Coinbase shares.
“Wall Street very much views Coinbase as just a pure exchange,” remarked Clemente, acknowledging that Coinbase has expanded its revenue streams by venturing into various areas such as staking, serving as a Bitcoin ETF custodian, and acquiring a stake in Circle.
Despite its diversification efforts, Coinbase faces challenges, including an ongoing legal battle with the United States Securities and Exchange Commission (SEC). Additionally, several U.S. senators are proposing bills to restrict cryptocurrency activities in the country, potentially impacting Coinbase.
Notably, Coinbase introduced its Ethereum layer-2 solution called “Base” in August. However, the platform has faced security issues, with incidents such as the $6.5 million Magnate Finance rug-pull and the $865,000 exploit on RockSwap occurring since its launch.
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