Could Coinbase's (COIN) Payment Protocol Ambitions Reveal a Shift in Its Competitive Positioning?

• Cloudflare, Inc. recently announced its intent to form the x402 Foundation in collaboration with Coinbase to develop a standardized internet protocol for digital payments, aiming to simplify payment requests and responses globally across websites, APIs, and AI agents.
• This initiative seeks to modernize the long-overlooked HTTP 402 "Payment Required" response, positioning Coinbase at the center of efforts to establish a universal standard for "Internet-native money" and potentially opening new avenues for automated and cross-border online commerce.
• We'll now examine how Coinbase's push for digital payment standardization through the x402 Foundation could reshape its investment narrative.

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Coinbase Global Investment Narrative Recap

For shareholders of Coinbase Global, belief in the ongoing tokenization of assets, broader adoption of blockchain-based payment rails, and the company’s ability to build real subscription and service revenues is central. The recent x402 Foundation collaboration with Cloudflare may accelerate Coinbase's relevance in global digital payments, but for now, the primary catalyst remains a rebound in spot trading volumes, while the biggest risk continues to be competition and fee compression, neither of which changes materially in the immediate term as a result of this news.

Other recent announcements, such as Caliber selecting Coinbase Prime for institutional trading and custody, reinforce the company’s push to deepen institutional relationships. This expands Coinbase’s platform credibility at a time when winning sustainable, non-transaction-based business is pivotal to offset cyclical trading revenue swings.

Yet even as Coinbase pursues new standards and expands its platform, investors should be aware of intensifying competition from decentralized exchanges, which could...

Read the full narrative on Coinbase Global (it's free!)

Coinbase Global's narrative projects $8.5 billion revenue and $2.1 billion earnings by 2028. This requires 8.3% yearly revenue growth and a $0.8 billion earnings decrease from $2.9 billion currently.

Uncover how Coinbase Global's forecasts yield a $370.09 fair value, a 18% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 32 Simply Wall St Community members span from US$138 to US$510 per share, with a distinct cluster between US$286 and US$361. While opinions differ, competition and long-term margin pressure remain at the forefront for this business, explore how others are factoring these issues into their outlook.

Explore 32 other fair value estimates on Coinbase Global - why the stock might be worth less than half the current price!

Build Your Own Coinbase Global Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Coinbase Global research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Coinbase Global research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Coinbase Global's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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