Coinbase to benefit from long-term adoption of blockchain technology: Oppenheimer

Broker Oppenheimer said in a research note on Wednesday that Coinbase (COIN) is well-positioned to benefit from the long-term adoption of blockchain technology, raising its earnings forecast for the cryptocurrency exchange.

Analysts Owen Lau and Guru Sidharth estimate that COIN trading volume will reach $300 billion in the first quarter of 2024, up 95% from the previous quarter and 107% from a year ago. “The adoption of digital assets continued into the first quarter of 2024 and beyond,” he said. approval This is the increase in spot Bitcoin (BTC) exchange traded fund (ETF) in January. ”

“More importantly, liquidity in the space continues to increase, with the average market capitalization of USD Coin (USDC) increasing 12% QoQ to $28 billion ($31 billion at the end of Q1 2024). ),” the authors write. USDC It is a stablecoin issued by Circle itself. Supported by Coinbase. Exchanges earn gross interest income from outstanding USDC balances.

Given the company’s improved outlook, the brokerage raised its price target on the stock from $200 to $276. Coinbase stock was trading 2.5% higher at $258 at the time of publication.

Oppenheimer points out that stocks are up more than 100% since January, while the S&P 500 is up just 6%. “At this level of trading, we are cautious about short-term volatility, but remain positive about the long-term adoption of blockchain technology.”

Still, there are some potential headwinds. While the stock may have strong momentum, there are also risks that investors need to be aware of, the report said. The broker previously expected approval for the Spot Ether (ETH) ETF to take place in May, but now says that is unlikely.

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