Feb 16 2024: JPMorgan upgraded Coinbase’s rating from Underweight to Neutral on Thursday, citing the surge in Bitcoin prices as the primary factor. The bank maintained its price target of $80 for the stock.
According to analysts at JPMorgan, the rise in Bitcoin prices not only boosts the overall crypto market but also improves Coinbase’s earnings outlook.
Initially, JPMorgan had concerns that the recent Bitcoin enthusiasm was fueled by overly optimistic expectations surrounding the approval and launch of U.S. spot Bitcoin ETFs over the past three months.
However, they acknowledged that what began as a sell-the-news reaction to the ETFs’ launch has transformed into significant appreciation in Bitcoin prices.
The analysts noted that this appreciation in Bitcoin is driving increased flows into spot Bitcoin ETFs, subsequently pushing Bitcoin prices higher and benefiting other cryptocurrencies as well.
With the recent influx of flows into Bitcoin ETFs and the substantial price appreciation of Bitcoin and Ethereum, JPMorgan anticipates that higher cryptocurrency prices will sustain and enhance activity levels, thereby positively impacting Coinbase’s earnings potential.
