With the crypto market continuing to rally in very impressive fashion, it should be no surprise to investors to see shares of centralized crypto trading platform Coinbase (COIN) absolutely take off.

Indeed, looking at the stock chart above, the 12-month move in COIN stock has certainly been tantalizing for investors. For those who bought near the April lows, a near-triple-up over this time frame indicates just how meaningfully this stock can move on any sort of bullish momentum in the crypto market when combined with strong institutional capital flows into this space. 

Let's dive into a big announcement Coinbase just released: the company is seeking a national trust charter from the Office of the Comptroller of the Currency (OCC) to expand its custody business. Here's what it means for investors and why Coinbase is once again on the move right now. 

What's the Big Deal?

Coinbase announcing plans to apply for a national trust company is a significant move. Similar to other players in the crypto space that either applied for bank charters or acquired companies with bank charters, the reality is that a company like Coinbase can benefit in an outsized way from operating what is considered to be a federally regulated trust.

With such a charter, Coinbase has the potential to see much higher growth in its banking and custody services segments, which are becoming a more meaningful piece of the revenue and earnings pie for the company. When times are booming and everyone wants to trade crypto, Coinbase will certainly take their cut in the form of transaction fees. But having a strong banking and custody business is important, as it will not only allow Coinbase to weather any potential storms on the horizon but also provide a much more stable and consistent earnings base from which COIN stock can hopefully head higher over time. 

What Do the Fundamentals Say?

If Coinbase can indeed receive the charter it's looking for to expand this key segment, I do think there's a lot to like about where COIN stock is positioned right now.

Looking at the company's valuation ratios above, it's clear that market participants are pricing in a growth slowdown moving forward, at least on the earnings front. Now, some capital will need to be put to work to put in place many of Coinbase's growth initiatives (such as its bid for its aforementioned charter).

However, with a profit margin near 40%, even factoring in some margin compression and additional capex spending, I think the company's forward multiple is likely compressed on an overall basis. That's because as the company's other services businesses continue to grow relative to its transaction fee business line, any sort of acceleration of top-line growth should bleed through to the bottom line similarly. In other words, Coinbase is maturing, and that's a good thing. 

What Do the Analysts Think?

Wall Street analysts covering Coinbase (and there are quite a few, 33 to be exact) are mixed in their views on where this stock is headed from here. That's evident when a company trading just shy of $380 per share has a high price target of $510 and a low price target of just $185.

The consensus price target on COIN stock currently sits at around $381 per share, implying the average analyst thinks this stock is basically fully valued right now.

That's probably a fair view for investors who are looking at Coinbase given its current state. 

However, if the crypto market continues to take off and Coinbase can successfully vertically integrate banking services into its model, perhaps the high target underestimates this company's value. On the other hand, if the crypto market undergoes another “winter” or period of cooling, and hiccups are seen with future integrations, it's possible there's plenty of downside from here.

High-risk, high-reward—that's what Coinbase investors want, and that's what they'll get with this name.