Coinbase stock target raised as analyst expects robust Bitcoin ETF inflows

JMP Securities analyst Devin Ryan raised his price target for Coinbase (NASDAQ: COIN) from $200 to $300, citing expectations of strong inflows into spot Bitcoin exchange-traded funds (ETFs).

“We estimate $220B of flows into spot-Bitcoin ETFs over next three years, multiples of what has already been experienced; Coinbase remains well positioned if we are correct,” the analyst wrote in the note.

Ryan maintained a Market Outperform rating on the stock.

JMP analysts first voiced their optimistic view on the impact of a potential spot-Bitcoin ETF on the crypto market and Coinbase's role within it in December 2023.

Contrary to the prevalent belief that such an ETF would negatively affect exchanges like COIN, they anticipated an opposite effect. Notably, JMP believed this view was misguided and overlooked the crypto exchange’s unique position and evolving business model in the broader crypto ecosystem.

Moreover, Ryan and his team believe that the current activity and flows into Bitcoin ETFs are likely just “the tip of the iceberg.”

“We estimate that after ~$10B in flows to date, two months into launch, flows will actually continue to grow materially from here over the next few years as the ETF approval is just the beginning of a longer process of capital allocation,” analysts wrote,

In this light, the broker views Coinbase, and a handful of its peers, as “significant beneficiaries of the additional capital flows” expected to enter the space.

With only a few firms possessing the necessary technical expertise and scale to facilitate entry and success for others in the digital asset space, JMP analysts see Coinbase “as currently well-positioned to participate in many areas of growth in an industry we estimate will grow by multiples over the next decade.”

By Vahid Karaahmetovic

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