The ultimate growth stock to buy for $1,000 right now

While there are thousands of cryptocurrencies vying for market share, betting on any coin to provide exposure to this growth can be extremely challenging. Instead, there’s a stock that could do the trick — Coinbase Global (NASDAQ: Coin).

As the clear industry leader driving innovation, Coinbase is the ultimate $1,000 growth stock to buy today for three key reasons.

1. Ideal proxy for crypto growth potential

The crypto market is full of excitement and potential, but the reality is that only a select few projects will thrive in the long term. Although it’s safe to assume that blue-faced cryptocurrencies like it Bitcoin and Ethereum will remain strong, the risk increases significantly with other cryptos. Rather than trying to pick future winners, investors may be better off with Coinbase, which offers broad exposure to the crypto market through its diverse business model, covering various crypto-based products rather than just a single asset.

Coinbase makes money from the transactions that take place on its exchange, but its platform is much more diverse and productive than in the recent past. Beyond transaction fees, Coinbase generates revenue through staking services, custody fees, stablecoin interest, and even its own blockchain, Base. This broad exposure ensures that Coinbase does not rely on a single revenue stream or cryptocurrency, making it a safer bet for those looking to take advantage of the growth of the crypto industry.

2. Diversification and resilience exemplified

On the topic of revenue streams, Coinbase’s business model hasn’t always been so diverse. For most of its existence, dating back to 2012, Coinbase’s revenue has been heavily dependent on transaction fees. At one point, Coinbase made more than 90% of its revenue from transaction fees. This overreliance resulted in a net loss of $1 billion in the second quarter of 2022.

But since then, things have changed as Coinbase went back to the drawing board. Today, transaction fees only account for about 60% of revenue, as the aforementioned revenue streams prove to be worth their weight in gold.

Moreover, during the same period, Coinbase has managed to reduce costs by about 30% while developing new revenue streams. When you add it all up, you have an incredibly well-run business that operates efficiently, innovates relentlessly, and is much better positioned to deal with the volatility inherent in the crypto market.

3. Venture capital potential

The last reason to consider Coinbase as a growth stock is a bit more speculative, but it may hold the most potential. It also reinforces the idea that investing in Coinbase is like investing in all cryptos.

Coinbase has a venture capital arm that invests in companies, cryptocurrencies and projects with long-term potential. To date, it has invested in nearly 400 different cryptocurrencies and high-profile companies such as Polygon and fit as well as under development such as Aerodrome and Arweave.

After investing billions of dollars in some of the most promising projects in the industry, Coinbase is positioning itself to capture significant value from the next wave of technological advancements in crypto. This strategy reminds of Google making early investments in companies like Android and Uber. Similarly, Coinbase’s venture arm has the potential to be a key growth driver for the company.

Venture capital investing often means taking calculated risks. While there may be some losers in Coinbase’s portfolio, the winners could more than make up for it. If just a few of these investments turn out to be big successes, they could pay significant dividends and ultimately lead to Coinbase gaining a much higher valuation.

Should you invest $1,000 in Coinbase Global right now?

Before buying shares in Coinbase Global, consider the following:

The Motley Fool Stock Advisor the analyst team has just identified what they think they are 10 best stocks for investors to buy now…and Coinbase Global was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $630,099!*

Stock advisor provides investors with an easy-to-follow blueprint for success, including portfolio construction guidance, regular updates from analysts, and two new stock picks every month. The Stock advisor the service has more than four times return of the S&P 500 since 2002*.

See the 10 stocks »

*The stock advisor returns as of September 3, 2024

Suzanne Frey, chief executive at Alphabet, is a member of the Motley Fool’s board of directors. RJ Fulton has positions in Aerodrome Finance, Bitcoin, Coinbase Global, Ethereum and Polygon. The Motley Fool has positions in and recommends Alphabet, Aptos, Bitcoin, Coinbase Global, Ethereum, Polygon, and Uber Technologies. The Motley Fool recommends Arweave. The Motley Fool has a disclosure policy.

The Ultimate Growth Stock to Buy for $1,000 Right Now was originally published by The Motley Fool