Goldman Sachs analysts presented the bull case for Coinbase Monday with a sweeping report that highlighted upsides across the nascent crypto economy.

Calling Coinbase’s newly listed COIN stock the “best way to gain exposure to the expansion of the crypto-native ecosystem,” the 54-page report provides analysis of decentralized finance (DeFi), competing centralized exchanges and brief overview of everything from dogecoin (DOGE) to monero (XMR) to non-fungible tokens (NFTs).

The “Buy” rating and $306 price target for COIN comes as Goldman Sachs ramps up its crypto trading desk with bitcoin futures and other products. However, the report suggests that at least Goldman’s research unit is apprising some of the more exotic corners of the crypto market.

“The development of DeFi applications is still in its infancy, and relative to the nearly ~$2+ trillion market cap for crypto currencies, the total value of crypto on DeFi applications is still relatively low at just ~$67bn,” Goldman Sachs’ Will Nance and Onkar Gandhi wrote, adding:

Though DeFi is seen as a competitor to centralized entities like Coinbase, the analysts said its growth has considerable potential to expand the crypto economy, and Coinbase’s business with it.

“Should this occur, though this is not part of our forecast, we believe that the ecosystem has the potential over time to drive meaningful amounts of activity and commerce,” Nance and Gandhi said.

Crypto as whole, they said, has the potential to “expand the market size of financial activities in the traditional financial industry.”

Goldman analysts said retail trading transaction revenue is likely to dominate Coinbase’s near-term profits. They projected the company controls as much as 30% market share among fiat-driven exchanges. 

The cash flow could shift if Coinbase’s fee model, already facing pressure from competitor exchanges, is forced to adopt lower pricing. Crypto market volatility would be good for business: more users tend to trade higher volumes during swings, meaning more fees, meaning more transaction revenue. 

Coinbase’s world-leading custody business is a “cornerstone” product well-positioned to capture a steady flow of institutional newcomers. And staking revenue could boom with more chains swapping their consensus mechanism and Coinbase taking a 25% cut. Ethereum’s transition to proof-of-stake “could be a significant driver of staking revenue going forward.”

Other potential growth areas: payments, non-fungible tokens and lending products. There’s “significant white space” for new products, the analysts said.

Goldman projects earnings per share of $8.09 for full year 2021, $4.90 for 2022 and $4.95 for 2023. These estimates come just under analyst consensus of $8.16, $4.96, and $5.80 for each year respectively. 

With COIN down 33% since its April listing, Goldman Sachs hedged its bullishness by illustrating how regulatory headwinds could slash token prices. Lower levels of crypto volatility could also negatively hit COIN’s revenue, the analysts said. 

They gave COIN 36% upside as the best “blue-chip” vehicle for chasing the crypto economy.

COIN is trading at $226 as of press time.