Coinbase Stock Soars Amid Surge in Bitcoin Value and Positive Forecast for Q1 2024
Summary:
Coinbase shares have seen a notable uptick recently, trading over $252, reflecting a 60% rise since the year's start and surpassing the $250 mark for the first time in two years. This growth has been influenced by Bitcoin's recent record-breaking performance, projected Bitcoin ETFs revenue, and a strong revenue statement for Q4 2023. Furthermore, JPMorgan analyst, Kenneth Worthington, upgraded his stock rating from underweight to neutral, recognizing the positive impact of Bitcoin ETFs on cryptocurrency markets.
The stock of the renowned cryptocurrency platform, Coinbase (COIN), has experienced a significant increase in recent times. As of now, it is trading over $252, reflecting a 60% increase since the start of the year, which matches its initial listing price. The stock managed to exceed the $250 milestone for the first time in two years on March 8, after suffering a major decline during the cryptocurrency market downturn in 2023 when it hit a low of $33. In the last twelve months, the shares of Coinbase have enjoyed an increase of over 300%.
The upward trend is partly attributed to the positive performance of Bitcoin (BTC), which also achieved a record-breaking value of $70,000 on March 8. It adjusted back to about $68,000 shortly after. The ascending flows from Bitcoin's exchange-traded funds (ETFs) and the buzz surrounding the upcoming split of BTC are important factors propelling this cryptocurrency surge. A case in point is BlackRock’s iShares Bitcoin Trust (IBIT) that amassed $10 billion in Assets Under Management (AUM) in just seven weeks after its inception on March 1.
Coinbase also benefits financially from Bitcoin ETFs, with many of the asset managers who launched Bitcoin ETFs in January partnering with Coinbase Custody, the platform's custody division. The expectation is for these ventures to generate fees between $25 million and $30 million.
In their recent earnings call, Coinbase revealed a strong fourth quarter for 2023. Net revenue for this period reached $905 million, a 45.2% rise from Q3 and surpassing the consensus estimate of $825 million.
JPMorgan analyst, Kenneth Worthington, adjusted his rating of the stock from underweight to neutral, highlighting the positive effect of Bitcoin ETFs on cryptocurrency markets. While he has set a target price of $80 for the stock, which is considerably below its current trading value, Worthington noted the recent influx into Bitcoin ETFs and the price increases of Bitcoin and Ethereum. He expressed optimism for the sustained higher cryptocurrency values to improve Coinbase's earning capacity heading into Q1 2024. This sentiment was shared in a report he authored on Feb. 15.
Published At
3/8/2024 9:15:00 PM
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