“Still, relative to the growth opportunity in the exchange and custody offerings, we see a just as exciting of an opportunity in the development of blockchain use cases today and expect Coinbase to participate in much of that continued evolution,” the authors wrote.

Those opportunities include participation in the tokenization of real-world assets, such as its recently announced partnership with Blackrock (BLK), activities in payments such as its venture with stablecoin issuer Circle and Web3 development and decentralized apps (dapps), as well as staking, the report said.

Coinbase can participate in much of the future growth and innovation in the sector by working with TradFi firms looking to become involved with digital assets rather than competing with them, the report added.

The broker continues to see spot bitcoin exchange-traded fund (ETF) adoption as a significant catalyst for the market, however, “ETF flows will not come on a smooth line, particularly with some transitory selling related to GBTC.”