When it comes to trillion-dollar corporations, the elite club is a sparsely populated space. As of now, the select members include tech giants such as Apple, Microsoft, and Amazon. Achieving a $1 trillion valuation is no mean feat and is reserved for a few with the perfect blend of attributes.
By 2035, the roster of the $1 trillion club is likely to undergo a transformation, with some incumbents fading and new entrants emerging. Among the potential aspirants is Coinbase Global (NASDAQ: COIN).
Image source: Getty Images.
The Potential of Proven Growth in a Burgeoning Industry
As of the latest data, Coinbase’s market capitalization stands at just under $40 billion. This suggests that for it to join the $1 trillion club, it would need to expand by a significant 2,400%. While this is an astronomical projection, Coinbase could potentially accomplish this given its current trajectory. Before shrugging off such colossal growth, it’s important to consider Coinbase’s history and how it provides a glimpse into its future.
Although Coinbase has only been a public company for a few years, its origins date back to 2012. Initially focused on making Bitcoin transactions more accessible, Coinbase’s business has evolved in step with the maturation of the cryptocurrency space.
Originally reliant on transaction fees for the bulk of its revenue, Coinbase now maintains a diversified revenue model with cutting-edge crypto products catering to both retail and institutional investors.
As Coinbase’s offerings have expanded, so has its user base. In the first quarter of 2018, there were approximately 23 million verified users on Coinbase’s platform. This number has now surged to nearly 120 million, translating to a 400% increase.
Predictably, as the user count has swelled, so has the revenue. In 2019, Coinbase raked in about $533 million in revenue. Based on the latest earnings report, the total revenue for 2023 skyrocketed to a staggering $3.1 billion, marking a nearly 500% increase in just four years and boasting a compound annual growth rate of 168%.
It’s important to note that these metrics only capture the growth over the last four or five years. If we were to factor in Coinbase’s earliest days, the expansion would be considerably larger, albeit this data is not readily accessible.
The Path to $1 Trillion
Coinbase ticks nearly every box required to be considered a candidate for the $1 trillion club. Proven growth? Check. A resilient and innovative business model? Check. A position at the vanguard of a burgeoning industry? Check.
However, to illustrate how it can join this illustrious club, the most pragmatic approach is to draw a comparison to an existing member — Meta (NASDAQ: META).
Despite Meta (previously Facebook) predominantly generating income from advertisers targeting audiences across its social media empire, there are striking parallels to Coinbase’s crypto-centric business model.
Both operate highly scalable digital platforms that incur minimal costs. Such platforms typically have lower marginal costs per user as the user base expands. Once the platform is established, adding new users typically involves negligible additional costs, contributing to scalable and efficient operations.
Additionally, owing to their digital nature, both entities benefit from network effects to drive revenue growth. A growing user base boosts the overall value of platforms. Greater user numbers attract more participants, fostering a self-reinforcing cycle that propels further growth.
Crucially, the resemblance in business models extends to each company’s financials. Among the seven companies currently valued at $1 trillion, Meta boasts the highest profit margins at 80%. While its annual revenue ranks second to last at $134.9 billion, its agile and lean business model yields industry-leading margins surpassing those of any other company.
COIN Gross Profit Margin (Quarterly) data by YCharts.
Herein lies Coinbase’s opportunity. Like Meta, Coinbase enjoys profit margins exceeding 80% due to its highly efficient business model. In fact, Coinbase’s profit margins are superior to all seven trillion-dollar corporations today at 86%.
If Coinbase’s revenue continues to grow at its current compound annual growth rate of 168%, it could witness revenue soaring to $90 billion by 2035. This figure is not far off from Meta’s $117 billion in 2021 when it first breached the $1 trillion mark. Assuming the profit margins remain steady, Coinbase’s future financials start to resemble those of Meta.
Final Considerations
The path to $1 trillion is far from guaranteed. Nonetheless, Coinbase has a significant edge shared by many current members of the $1 trillion club — a leading position at the forefront of a paradigm shift. Analogous to how social media revolutionized our daily interactions, cryptocurrencies wield the potential to transform businesses, economies, and our financial lives.
The prospective growth of such disruptive technology is challenging to quantify and predict. Nevertheless, a glance at its history illuminates its potential. In just 15 years, the total cryptocurrency asset class has burgeoned in value from a few million dollars to a thriving economy worth over $1.5 trillion. By nearly every measure, cryptocurrencies have surpassed forecasts, with practically every prior prediction underestimating their true potential. If Coinbase continues to ride the crest of the cryptocurrency wave, reaching $1 trillion seems increasingly plausible.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. RJ Fulton has positions in Coinbase Global. The Motley Fool has positions in and recommends Amazon, Apple, Coinbase Global, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
