Coinbase stock and the YieldMax COIN Option Income Strategy (CONY) ETF will be in the spotlight after Bitcoin surged above the key resistance level at $100,000. CONY was trading at $18 on Wednesday, down by 37% this year, while COIN was at $330, up by 90% this year.
Bitcoin price hits $100,000
The main catalyst for the Coinbase and CONY ETF will be the ongoing Bitcoin price surge as it crossed the important resistance level at $100,000. It then quickly jumped to $103,000, a trend that could continue in the coming months.
Coinbase and other crypto-related companies do well when Bitcoin is in a strong uptrend because of the impact on volumes. Ideally, when Bitcoin rises, other altcoins rise as well. The market cap of all cryptocurrencies has jumped to over $3.8 trillion.
Recent data shows that centralized and decentralized exchanges have seen higher volumes, a move that will benefit Coinbase.
Data by The Block shows that the volume traded in CEX exchanges rose to the highest level this year in November. Coinbase handled over $175 billion in transactions, a big increase from the $62 billion it processed a month earlier.
Most importantly, Coinbase’s Base Blockchain has also become the fourth-biggest chain in the crypto industry. Its 24-hour volume stood at $1.69 billion, while its seven-day volume was $12.2 billion. Base Blockchain has handled almost $50 billion in volume since its inception.
Coinbase is growing
A key challenge for Coinbase is that its business has lost market share to companies like Bybit and Crypto.com.
Still, the most recent results showed that its business was doing well. Its revenue rose to $1.2 billion, while its net income was about $75 million.
The company is also expanding its business in other areas. In addition to transaction revenue, which stood at $572 million last quarter, it has become a large player in the subscription business. Its stablecoin revenue rose to $246 million, while its total subscription and services revenue jumped to $556 million. Its custody business, which houses its ETFs made over$31 million.
Coinbase is also benefiting from its Bitcoin holdings. Data by BitcoinTreasuries shows that the company has 9,480 Bitcoins in its balance sheet. These coins are now worth over $976 million.
Coinbase stock vs CONY ETF
For an investor interested in Coinase, there are two main ways to go about it. They can invest directly in the stock and benefit as it rises. The other option is where they invest in the CONY ETF, which generates dividends.
Coinbase stock is a straightforward way to invest in the company. CONY, on the other hand, uses covered calls to invest in the company. In this, it invests in the stock and then sells call options. A call option gives an investor a right but not the obligation to buy an asset.
After selling the call option, the fund receives a premium, which it distributes to shareholders as a dividend. Data by SeekingAlpha shows that the yield now stands at 124%.
Data shows that the Coinbase stock price has jumped by 134% in the last 12 months, while the CONY ETF has dropped by 30.5%. However, with dividends included, the CONY ETF has had a total return of 94%, still lower than COIN’s 134%.
Therefore, using this data, it makes sense to invest in the 0%-yielding Coinbase than the 125%-yielding CONY ETF. The same is true with other covered call ETF funds like the JPMorgan Equity Premium Income ETF (JEPI) and JPMorgan Nasdaq Equity Premium Income (JEPQ), which often underperform the S&P 500 and Nasdaq 100 indices.
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