Coinbase Stock Forecast as it Launches Bitcoin-Backed Mortgages

Coinbase stock has extended its August recovery as Bitcoin returned above $80,000 and investors assessed the broader rollout of Better Mortgage’s crypto-backed home-financing product.

COIN had gained more than 20% over five sessions during the latest crypto-market rebound. The mortgage initiative adds another product to Coinbase’s push beyond traditional spot cryptocurrency trading.

Coinbase Stock Rises as Bitcoin Mortgage Access Expands

Coinbase, the biggest crypto exchange in the United States, has been aggressively working to diversify its business. In a statement today, August 26, the company said that it was launching Bitcoin-backed mortgages in a partnership with Better Finance.

The process will work in simple stages. First, a customer will need to get the mortgage from Better Finance. Second, the customer will then pledge his Bitcoin holdings and secure the mortgage. After this, customers will get up to $10,000 in rebates. After paying off the mortgage, the Bitcoin will be returned to the customer.

This business is a capital-light one for Coinbase since it will not provide the loans itself. Instead, it will just take a commission from the transaction.

A Bitcoin holder may want to take out a mortgage if he believes that the coin will continue going up. Eventually, the customer will benefit from the house appreciation and the growing value of Bitcoin. The risk, however, is if the coin’s price drops.

This is a big market for the company as millions of Americans have mortgages, which are now valued at over $13.1 billion.

Coinbase is Diversifying Its Business

The new business line is one way in which Coinbase is expanding its operations. For example, it launched a big partnership with Morpho to launch Bitcoin-backed loans in 2024. Today, this business has continued to grow, with Morpho having a total value locked (TVL) of over $9.4 billion. It is one of the top protocols have seen strong growth during the crypto winter.

Coinbase has also launched a new prediction platform, making it a big competitor to top companies like Polymarket. This business experienced strong growth during the recent World Cup event. Like Robinhood, Coinbase will likely create its own predictions platform, letting it avoid sharing its revenue with Kalshi.

The company has also evolved into an all-in-one trading platform and has launched additional assets, such as stocks and ETFs. This expansion will help it to have a more diversified model, which will help it keep growing even when the crypto market is crashing.

The most recent results showed that the company’s business is struggling, with its revenue crashing by double digits. Its transaction revenue dropped to $599 million in the second quarter from $764 million in the same period last year. Its subscription and services revenue also dropped to $555 million during the quarter.

Analysts believe that its weakness will continue to worsen, with the third-quarter revenue falling by nearly 40% to $1.16 billion. Its EPS is expected to move into a 14-cent loss after making a $1.5 profit.

Coinbase Stock Price Technical Analysis

The daily chart shows that the COIN stock has rebounded, moving from a low of $137.87 to a high of $181. Its lowest level this year was an important support level as it was its lowest level on February and June.

The stock has jumped above the descending trendline that connects the highest swing since April. Also, it has jumped above the 50-day moving average. The risk, however, is that it has formed a fair value gap and an island reversal pattern, suggesting a near-term reversal. If this happens, it may drop to $137.