When an industry starts out, there may be dozens, if not hundreds of competitors. But, much like the automotive industry, eventually the space will consolidate into a few big players.
Sometimes, that consolidation will occur through acquisitions. Other times, an economic crisis or two will also help to shake out weaker competitors.
And consumer tastes and preferences may make it easy for a big player to stay big, even if newer companies try and grab market share.
The shakeout in the cryptocurrency broker market over the past year has seen several companies go bankrupt. Others have been acquired by bigger players.
One company is starting to look like the long-term winner for the space: Coinbase (COIN).
The crypto broker is moving higher as Bitcoin and other cryptos have rallied hard so far this year. And it may be a big beneficiary from the latest upgrade to the Ethereum blockchain.
Action to take: Things look ugly for the company. Revenues slid 76 percent last year thanks to the crypto winter. But this year is looking up already, thanks to rising crypto prices and reduced competition.
This could be a long-term buy, especially with Bitcoin’s next halving now about a year away.
For traders, shares look likely to keep trending up. The June $90 calls, last going for about $5.65, can deliver high-double-digit gains in the months ahead if the current rally continues at the rate it’s going.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.