Anyone holding Bitcoin or other cryptocurrencies in their portfolio recently may be feeling uneasy as prices have been highly volatile, with continuous downward adjustments turning previously profitable portfolios into losses.
If your inner voice says "too risky," consider an alternative perspective: instead of betting on fluctuating coin prices, becoming a "crypto exchange owner" could be a more attractive option.
Because regardless of whether coin prices rise or fall, as long as trading activity continues, exchange businesses generate steady revenue through transaction fees.
One of the largest and most renowned U.S. crypto exchanges is Coinbase, which Thai investors can now easily access via the Thai stock market.
Through Depositary Receipts (DRs), let's explore who Coinbase is, how its business operates, and what investment options are available via DRs.
Coinbase Global, Inc. Traded under the ticker COIN on Nasdaq, Coinbase is an American company founded in 2012 by Brian Armstrong and Fred Ehrsam. Headquartered in San Francisco, it is the largest digital asset trading platform in the U.S. and part of the S&P 500 index.
Coinbase’s main business model includes multiple revenue streams and does not rely solely on "trading fees," such as:
What makes Coinbase interesting is its positioning as the "infrastructure" of the crypto economy, not just an exchange, serving as custodian for major assets of spot Bitcoin and Ethereum ETFs in the U.S.
This diversification helps sustain revenue even during crypto market downturns, supported by subscription income.
According to the latest financial results, Q1 2023 was challenging, with revenue of $1.41 billion, down 31% from $2.03 billion the previous year.
The decline mainly reflects weaker crypto market conditions compared to the prior quarter, resulting in a net loss of approximately $394 million, marking the second consecutive quarterly loss.
However, management emphasizes that pressures stem from "external market conditions" rather than operational issues. The company holds over $10 billion in cash and $12 billion in total available resources.
Coinbase is proceeding with share buybacks and expanding new products such as derivatives and prediction markets, which are growing rapidly—key areas to watch for a potential turnaround.
Analysts from Asia Plus Securities view Coinbase stock as a short-term option for investors looking to speculate on Bitcoin’s recovery, despite Bitcoin having declined about 23% year-to-date and remaining in a downtrend.
Historical data over the past decade shows that July tends to be a positive month for Bitcoin returns, especially in U.S. midterm election years, with average July returns ranging from 20-30%.
Therefore, when Bitcoin prices rise, stocks linked to the crypto market like Coinbase often benefit. DRs referencing Coinbase shares are recommended for investors seeking to speculate on Bitcoin’s potential recovery (notably COIN01).
Thai investors can "own" a stake in Coinbase’s business via Depositary Receipts (DRs) listed on the Stock Exchange of Thailand, traded in baht during regular market hours.
Prices per unit are designed to be accessible, starting at just a few baht, since each DR represents a "fraction" of a parent share rather than a full share.
Currently, three Coinbase DR symbols trade on the Thai market:
Note: Prices as of the morning market close on 17 Jul 2023 GMT+7.
Although all three reference the same underlying Coinbase Global (COIN) share and follow identical price and USD/THB exchange rate movements, the real differences are:
Issuer, trading liquidity, fees, and convenience linked to the investor’s existing brokerage account.
Therefore, before choosing, investors should compare market price versus indicative price, recent liquidity, and brokerage fee structures carefully.
Investing in Coinbase via DRs resembles buying foreign stocks, carrying risks from parent share price volatility, currency exchange fluctuations, and crypto-specific risks tied to transaction volumes.
Interested investors should thoroughly research and consider their risk tolerance when determining allocation.
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