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Shares of Coinbase falling, despite the company's fourth quarter earnings beating the streets estimates on the top and bottom lines, revenue more than doubling year over year in the quarter, driven by Bitcoin's post-election rally. Citizens JMP raising its Coinbase price target to 475, also maintaining its outperform rating. From our I want to bring in Devin Ryan, Citizens JMP director of Fintech research. Devin, great to speak with you. This is, this is crazy. Revenue spiking 138% for Coinbase and I'm coming to you saying that the stock is down. What's going on?

Hey, good morning, Madison. Well, you know, the stock did go up over 8% yesterday, so it ran pretty hard into results. It's up 50% uh since the election. So, yeah, I think it ran pretty hard into results, uh and you're just seeing a little bit of uh, uh kind of, um, you know, small sell-off this morning and kind of a little bit of a volatile market. But uh, the story here is fantastic and you know, obviously, huge fourth quarter results. They gave some kind of early indication of the first quarter maintaining that momentum. And when you take a step back, this is much more than about kind of what's happening in the fourth quarter or first quarter. It's about really the seismic shift happening in uh the crypto space more broadly and, you know, how blockchain is now going to see a step function in adoption. And that's what gets us excited and that's really driving our price target, not the fourth quarter results or even what's happening in the first quarter.

Devin, from Robin Hood, we heard a lot about tokenization of private assets. To what extent is that a similar case for huge opportunity for Coinbase?

Yeah, Brad. It's going to be huge. And and I think that's the big picture here that you've had an industry that has really been held back uh for uh, you know, really the past handful of years here. And so what's happening is we're starting to, we're in process of getting to a point of clarity. Uh you have the trifecta. You have a White House that's supportive, you have a bipartisan Congress right now that's looking to pass legislation, and then you have a regulatory backdrop where we're now finally getting to a point of clarity. And so areas like tokenization, areas like payments, remittance, uh integrating with Web3 and just integrating blockchain into the economy more broadly, we're finally getting to a place where I think companies that are in the space like Coinbase are going to be able to execute on the vision that they've had for many years. And that, that's what's exciting. But yet tokenization could be multi-billion dollar kind of long-term opportunity uh for firms like Coinbase in our opinion, as can, you know, an increase in stable coins as can staking, as can uh all these other ancillary areas which are not really even in results in a major way right now.

Is good news for Coinbase always going to be good news for Robin Hood? And at what point does the success story for both of those companies potentially start to run into one another?

There is a lot of correlation right now and I would say, you know, obviously, Coinbase is digital native and entirely focused on digital assets. And you know, I, I view Coinbase as really an infrastructure play on the growth in the industry. And I think people are getting it wrong when they think about competition entering and that's a risk for Coinbase. It's actually exactly what Coinbase wants because it validates that this industry is going to grow quite a bit. And, and they're really well positioned for that. Robin Hood on the other hand, I think is uh, really, you know, they've been held back on their offerings. So they've been very limited on the crypto assets, even for trading, let alone getting into all these other ancillary areas like staking and integrating stable coins more deeply. And then, you know, tokenization and all the things that are coming with blockchain. So I think Robin Hood, you know, also sits kind of at the intersection of traditional finance and uh, and digital assets. And so they're in a great spot to be able to execute on that. I think there will be a convergence. Obviously, Robin Hood is also buying a, a crypto exchange. And so uh, on one hand, they will look more like Coinbase, but Robin Hood is going in many other directions as well with, obviously, trading of traditional assets, and then getting into, you know, financial advice and other parts of uh, of financial services. But Coinbase will do similar, but you know, as we tokenize and move stuff onto the blockchain, uh, you know, a lot of I think financial services will, um, essentially merge with uh, with digital assets as well. And so that's our big picture of where we're going over the next decade.

Devin, while we have you, just wanted to talk a little GameStop as well. Taking a look at shares here, they are up right now by about 6%. That's off of today's session highs that we saw at the open off of the back of earnings here. I, I wonder as you're thinking through some of the investments that they're exploring reportedly, as well as what we at least heard through the earnings release, since this company won't give us regular earnings calls at this juncture, how you're evaluating the kind of future fundamentals as they can be analyzed at this juncture for GameStop.

Yeah, so I, I don't cover GameStop, but uh, what I can speak to is kind of this idea of exploring digital assets and putting them on the balance sheet, which we've obviously seen. And I think you're seeing that now happen across the industry and you're seeing positive reactions uh, to that, kind of this reserve or treasury strategy. And that's a validation of the asset class. And I think something that um, you know, both obviously drives adoption and, and for firms like Coinbase that I do cover, drives, you know, trading activity and custody activity. But then also, what we're seeing I think is big conversation around a crypto or Bitcoin reserve, uh, you know, that, that drives price. And so, you know, we've done math around that and we think that, you know, you could see, if you see these reserves happening and more adoption at the corporate level, and that could drive crypto market cap up by multiples from here. And that's what gets us excited that you've got adoption occurring, but on top of that, uh, you know, the, the buying demand that didn't exist before is coming through and that's very good for price.

You know, I, I guess just a quick follow on that. It seems like a, a page from the Microstrategy playbook. If you can annex more of your balance sheet to crypto then you're, yeah, a, a company that just has, in GameStop's case, a bunch of retail locations where you happen to sell games, but you want to be thought of as a crypto holder. How effective is that in terms of driving price for Bitcoin from this juncture?

You know, I think you have to kind of differentiate between there's Bitcoin and then there's everything else in crypto. And uh, you know, obviously, um, you know, Bitcoin is, you know, the largest asset and I think has been historically uh, the most stable asset. And so, uh, it were, you know, obviously more established ETFs and seeing adoption grow just off of the back of those items. And so I do think that uh, we're in the early innings of seeing more reserves, whether it's at the governmental level across, you know, US or other nation states, um, or even, um, you know, now companies as well. And so that is important to uh, part of the price thesis. Uh, but that's not in my opinion really even priced in. A lot of that is, you know, can this happen? And if it does, that would drive multiples of the market cap as I just mentioned. And then, you know, other crypto assets, we'll see. I mean, they all have different stories. And I think, you know, obviously, different arguments around the valuation. But I think part of this, you know, my guess is for companies that are adopting a broader reserve, you know, it's a view of having connectivity to this new technology and viewing it as a way to gain exposure to upside, uh, you know, in, in essentially assets that can beat inflation or beat other types of assets that you may hold in reserve. And I think companies have to think about the risk profile of what their treasury is going to look like as well.

Devin, great catching up. Great getting some of your analysis. Appreciate it.

Yeah, great to see you guys. Thank you.