JPMorgan Upgrades Coinbase Global Inc. (COIN) to Neutral, 'Surge in Bitcoin Price Takes Crypto Market and Coinbase Earnings Power Higher'
JPMorgan analyst Kenneth Worthington upgraded Coinbase Global Inc. (NASDAQ: COIN) from Underweight to Neutral with a price target of $80.00.
The analyst comments "We are upgrading Coinbase from Underweight to Neutral reflecting the surge in Bitcoin, Ethereum and broader cryptocurrency prices. We have been quite concerned that the enthusiasm in Bitcoin over the last three months was being driven by unrealistic optimism for new money going into the cryptocurrency market through the newly approved and recently launched U.S. spot Bitcoin ETFs. After significant token price appreciation in 4Q23, we saw the potential for a weaker launch to deflate market enthusiasm and ultimately reduce what had become more active cryptocurrency trading levels. Our analysis of the gold ETF launch in 2004 and the penetration of equity ETFs in the US equity market reinforced our view that there was risk to the enthusiasm driving Bitcoin and cryptocurrency prices and activity higher. However, what was initially a sell-the- news event with the launch of U.S. Bitcoin spot ETFs, has now turned into meaningful Bitcoin price appreciation. In our opinion, we think this Bitcoin appreciation is contributing to better spot Bitcoin ETF flows, which is in turn driving Bitcoin prices higher, and pulling other tokens higher as well. Given the acceleration in recent days of flows into Bitcoin ETFs and the significant price appreciation of Bitcoin and now Ethereum, we are returning to a Neutral rating on Coinbase as we see the higher cryptocurrency prices not only sustaining, but improving, activity levels and Coinbase’s earnings power as we look to 1Q24. While we see many of the risks to Coinbase’s stock price, including ETFs as Coinbase competitors and valuation, we think the Neutral rating is the right call here. We maintain our estimates and $80 Dec-2024 PT in advance of Coinbase’s earnings report after the close."
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Shares of Coinbase Global Inc. closed at $160.38 yesterday.