It has been a long, cold winter for Coinbase Global (COIN 14.38%) shareholders, who have endured a long and painful slog down from the stock's 52-week high. But just like spring is around the corner, some green shoots are blooming for Coinbase.

What's going on with Coinbase and Shopify?

On Monday, Jan. 31, Coinbase announced that Shopify (SHOP 2.15%) CEO Tobi Lütke is joining its board of directors. Shopify is one of the biggest success stories in the stock market over the past five years, so Lütke's presence on Coinbase's board should be welcome news for shareholders. Furthermore, Shopify has already been working together with Coinbase to integrate crypto payments onto its e-commerce platform, and this new announcement further strengthens the ties between the crypto exchange and the e-commerce giant. As cryptocurrencies continue to strive for mass adoption, a growing collaboration between Coinbase and Shopify could be fruitful for both companies.

Various cryptocurrency coins.

Image source: Getty Images.

Entering the NFT arena

In October, Coinbase announced it will roll out Coinbase NFT, its own platform for non-fungible tokens (NFTs). Coinbase wants to simplify the user interface and process of buying an NFT for users, which could have appeal to new crypto users who may be intimidated by the current process. Furthermore, Coinbase stated that it wants to add a social aspect to its NFT platform, which I think is important because at the end of the day, buying an NFT is not that much different than a wealthy collector buying a piece of traditional art to show off to visitors to their home or office. I envision Coinbase enabling its customers to use their NFT as their profile picture on the platform, for example, which I think would have huge appeal to NFT fans who like to use their NFTs as status symbols. 

While some observers are skeptical of the staying power of NFTs, there is no question that they have evolved into a serious business. For example, Cryptoslam reports that Bored Ape Yacht Club, the most prominent NFT project to date, has generated $285 million in sales over the past 30 days. Justin Bieber just bought a Bored Ape for 500 Ether (ETH), Ethereum's native currency, which comes out to over $1.29 million. The new floor price for Bored Ape NFTs is 200 ETH (over $500,000 at time of writing). Opensea, the largest Ethereum NFT marketplace, was recently valued at over $13 billion in a private funding round. 

Establishing a strong foothold in this lucrative area of the crypto ecosystem seems like a great move for Coinbase, and it can use its scale and reputation as an industry leader to its advantage. 

Valuation looks undemanding

The sell-off in unprofitable, speculative tech stocks this winter has been pronounced and rapid. Coinbase has sold off like the rest of these stocks. However, Coinbase should not be grouped with those stocks. In fact, Coinbase is already generating over $2 billion in profit and, after the sell-off, now trades at 18X earnings. That's a decidedly reasonable valuation in a market where many slow-growth consumer staples companies like soft drink producers and fast food chains all trade at price-to-earnings multiples approaching 30X. If the recent sell-off has taught investors one thing, it is that buying companies at an advantageous valuation is a key part of generating excess returns over the long term. On that note, Coinbase's current valuation seems to offer a good entry point. 

Is Coinbase a buy? 

Investing in Coinbase is not without risk, and shares have been volatile as they often trade in sympathy with the price of Bitcoin. But long-term, this looks like a great entry point for risk-tolerant investors who want to invest in an industry leader in the burgeoning crypto space at a reasonable valuation. Positive developments like Shopify's Lütke joining the board and the launch of its NFT platform should prove fruitful in the future, and I believe the best is yet to come for shares of Coinbase.