What happened

Shares of the large crypto exchange Coinbase (COIN -3.24%) rose by nearly 13% on Friday, ending a chaotic week in the crypto world.

Coinbase also received some positive sentiment from Wall Street today and rose on a day when rival exchange FTX filed for bankruptcy.

So what

The world of crypto got flipped on its head this week after FTX, one of the world's largest crypto exchanges, ran into liquidity issues and was suddenly in desperate need of a bail out.

For a short time, it looked like another rival exchange Binance would save FTX but the deal fell apart. Today, FTX filed for Chapter 11 bankruptcy, and CEO Sam Bankman-Fried resigned.

Coinbase sent an email to its users today to assure them that it is keeping their funds safe and secure. It also reiterated its strong financial position with $5 billion of cash and cash equivalents on its balance sheet.

Additionally, the research firm Piper Sandler reiterated its "overweight" rating on the stock, saying that Coinbase can "weather a prolonged crypto winter."

Now what

Obviously, it's been a very bad week for the entire crypto industry, and the FTX debacle is likely to increase regulation on crypto exchanges and very well could extend what has already been a cold crypto winter.

But long term, Coinbase may benefit from this because one of its competitors has gone down, and pending regulation may increase barriers to entry. There are also a lot of potential crypto customers from FTX that Coinbase could try and bring on its platform, although it's hard to say exactly how things will play out with everything so fresh.

I am rating Coinbase a hold right now. Ultimately, I think crypto trading is here to stay and that Coinbase is an important player in the industry.