Mar 14 2024 JMP Securities analysts have revised their price target for Coinbase (NASDAQ: COIN) upwards, from $200 to $300, citing anticipated strong inflows into spot Bitcoin exchange-traded funds (ETFs).
In a note, analysts stated, “We estimate $220 billion of flows into spot Bitcoin ETFs over the next three years, multiples of what has already been experienced; Coinbase remains well positioned if we are correct.”
The analysts maintained a Market Outperform rating on the stock.
This optimistic outlook was initially expressed by JMP analysts in December 2023 regarding the potential impact of a spot-Bitcoin ETF on the crypto market and Coinbase’s role within it. Contrary to common belief that such an ETF would negatively impact exchanges like COIN, JMP anticipated the opposite effect, highlighting Coinbase’s unique position and evolving business model in the broader crypto ecosystem.
Furthermore, analysts believe that the current activity and flows into Bitcoin ETFs represent only the beginning. They estimated that despite approximately $10 billion in flows to date, two months into the launch, flows would continue to grow significantly over the next few years as ETF approval marks just the start of a longer process of capital allocation.
In this context, the brokerage sees Coinbase, along with a select few of its peers, as “significant beneficiaries of the additional capital flows” expected to enter the space.
Given the limited number of firms possessing the required technical expertise and scale to facilitate entry and success for others in the digital asset space, JMP analysts view Coinbase as currently well-positioned to capitalize on various areas of growth in an industry projected to expand exponentially over the next decade.