Shares of cryptocurrency exchange platform Coinbase (NASDAQ:COIN) gained consciously against a soft backdrop on Wall Street Thursday. With the company seeking a move into France, it may possibly see greater linearity in its future revenues. In addition, the European powerhouse is seeking to bolster its technology profile, which may organically help boost COIN stock.
According to a CNBC report, Coinbase secured registration with the French markets regulator, which opens the door for the platform to expand its services in a key European market. Known as the Autorité des marchés financiers or AMF, the agency ensures the protection of savings, investors’ information and the proper functioning of financial markets, per its website.
The AMF awarded Coinbase a virtual asset service provider (VASP) approval. This decision effectively green-lights the crypto specialist to operate digital currency services in France. Further, the VASP registration “will allow Coinbase to offer custody of digital assets, buying or selling digital assets in legal tender, trading of digital assets against other digital assets, and operating a digital asset trading platform.”
Notably, CNBC states that French regulators — alongside their European counterparts — have been playing catchup with the rise of decentralized assets. While they recognize the underlying blockchain’s potential for improving payment systems, they also seek to protect consumers.
COIN Stock May See Greater Revenue Stability
For the French government, the development surrounding COIN stock aligns with its broader initiatives in the field of innovation. Per CNBC, the country has recently been pushing to become a leader in technology. So far, it has touted its artificial intelligence and cloud computing capacities. The efforts fall under President Emmanuel Macron’s bid to promote France as a global tech hub.
For COIN stock, the underlying company may benefit from a broadened scope. That’s especially important since the U.S. Securities and Exchange Commission (SEC) sued Coinbase as part of its campaign against cryptos. However, Coinbase has refused to back down, stating that it has worked to comply with financial regulations.
Still, the biggest benefit for COIN stock could be a possible pathway to a more linear revenue profile. While the crypto sector brings much excitement, it’s also incredibly volatile. As a result, Coinbase’s revenue largely matches the wild ebb and flow of benchmark crypto prices. With an expanded footprint, the company may be able to enjoy greater predictability in the top line.
Finally, a significant upside opportunity exists. According to a November survey, about 9.4% of the French population holds cryptos. Further, virtual currencies have become France’s second-most popular investment asset type.
Why It Matters
Currently, analysts rate COIN stock as a consensus hold. This assessment breaks down as seven buys, six holds and seven sells. Conspicuously, shares have skyrocketed about 59% in the trailing month. Thus, the average price target sits at $98.83, implying about 39% downside risk.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
