Coinbase Valuation In The Current Environment. Federal Reserve Targeting Lower Rates

Coinbase Inc, the Bitcoin, cryptocurrencies exchange could triple its market capitalization in the space of 1 year in the current macroeconomic and financial environment.

The Federal Reserve, the central bank of the United States has pivoted in its latest meeting in December 2023, implying that it will soon lower the target for the Federal Funds Rate, which the Federal Reserve can influence via its monetary policy tools and thus lower the general interest rates level in the US and by extension partly in the global economy.

Lower interest rates help small businesses, Bitcoin, crypto related including, with cheaper loans. In addition, lower interest rates increase the risk-reward appeal of venture capital funds, because when interest rates are low, institutional investors like pension funds and endowments find it relatively less attractive to hold predominantly US treasuries and more attractive to invest small part of their multi- trillion USD of assets in venture capital funds and small and medium technology startups enterprises, many of which are Bitcoin, cryptocurrencies, blockchain development related businesses. Venture capital funds might invest part of funds flowing into them in Bitcoin, cryptocurrencies, blockchain related technology startups, which will boost the money turning within the crypto sector, increase the media coverage of Bitcoin, cryptocurrencies startups and by extension of Bitcoin, cryptocurrencies bringing an air of novelty, newness into Bitcoin, crypto. Again. This increased media coverage and new found novelty of Bitcoin, cryptocurrencies will increase the general public's acceptance of cryptocurrencies and thus increase even more the cash inflows in the Bitcoin, cryptocurrencies sector, which will raise prices of Bitcoin, cryptocurrencies and the associated cryptocurrencies associated publicly listed stocks like Coinbase, Nu Holdings Limited, Robinhood markets, Microstrategy, etc.

In short, in the current environment of pending monetary loosening Coinbase is still grossly undervalued, despite Coinbase's stock price more than tripling in 2023. Coinbase's market capitalization could again triple in 2024.