Goldman Sachs Upgrades Rating on Coinbase to Neutral, Sets New Price Target
Goldman Sachs has upgraded its rating on Coinbase from sell to neutral, setting a new price target of $282 for the stock. This adjustment reflects a shift in Goldman Sachs’ view on Coinbase, influenced by recent bullish trends in the cryptocurrency market.
Increase in Market Share and Trading Volumes
Blockchain analysis firm Kaiko reported that Coinbase’s market share in the U.S. has increased by 13% following the SEC’s approval of 11 new spot Bitcoin ETFs in January. This increase in market share aligns with a surge in cryptocurrency prices and a significant rise in daily trading volumes on Coinbase.
- Coinbase witnessed nearly $5 billion in trading volume on Jan. 11, the day the Bitcoin ETFs started trading.
- This surpassed its 2023 volume and approached the volume recorded on the day FTX filed for bankruptcy in November 2022.
On March 6, Coinbase achieved a record volume of approximately $12 billion, even amidst technical difficulties during high-volatility periods.
Improved Revenue Forecast
As a result of these developments, Goldman Sachs has raised its revenue forecast for Coinbase by 48%. In mid-February, Coinbase reported a profit of $273.4 million for the quarter, a significant improvement compared to a $557 million loss in the same quarter the previous year. This turnaround is particularly noteworthy considering the $2 million loss reported in the third quarter of 2023.
Reassessment of Long-Term Viability Concerns
The previous sell rating by Goldman Sachs was based on concerns about the long-term viability of the cryptocurrency market. However, recent market performance and adoption rates have led to a reassessment. The new price target of $282 suggests a more positive short-term outlook for Coinbase in the current market rally.
Hot Take: Goldman Sachs Sees Potential in Coinbase Amidst Bullish Market Trends
Goldman Sachs’ upgraded rating and increased price target for Coinbase indicate the investment bank’s recognition of the positive momentum in the cryptocurrency market. As more Bitcoin ETFs gain regulatory approval, Coinbase has experienced a notable increase in its market share and trading volumes. This surge in activity has also translated into improved financial performance, with Coinbase reporting significant profits.
While concerns about the long-term viability of the cryptocurrency market still exist, Goldman Sachs’ reassessment signifies a growing confidence in Coinbase’s short-term prospects. With the new price target of $282, investors may consider Coinbase as a potential investment opportunity amidst the ongoing market rally.
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