Mar 8 2024: According to analysts at Goldman Sachs, the recent spike in digital asset prices, reaching all-time highs, has contributed to increased trading volumes and greater participation from retail investors on the cryptocurrency exchange Coinbase (NASDAQ:COIN).
In a client note issued on Thursday, Goldman Sachs upgraded their rating of Coinbase stock from “Sell” to “Neutral,” highlighting that daily trading volumes on the platform have surged to levels not witnessed since 2021. The analysts project that this trend will lead to a 48% rise in Coinbase’s annual revenues and a 114% increase in core earnings.
The analysts stated, “[O]ur analysis suggests much of the recent price action has been driven by elevated retail participation (we estimate roughly 20% of volumes), which fundamentally come in at much more attractive take rates for [Coinbase] (though we expect some downward pressure on retail take rates due to higher Advanced trade participation).”
Earlier this week, Bitcoin achieved a new record high, largely attributed to consistent capital inflows into recently-approved U.S. spot exchange-traded funds and anticipation surrounding an upcoming “halving” event.
Bitcoin’s value has soared more than four-fold since hitting a low of approximately $15,000 in November 2022, following the notable collapse of the crypto exchange FTX. Additionally, Bitcoin experienced a surge of about 150% throughout 2023.
