Coinbase’s Dominance in the US Bitcoin Market Surges After ETF Approval
After the approval of Spot Bitcoin ETFs, Coinbase has seen a surge in dominance within the U.S. market with respect to BTC share. The reason behind this increase could be Coinbase’s move to serve as a custodian for 8 of the 11 newly approved Bitcoin ETFs.
Coinbase Registers Jump In Bitcoin Market Share
In the past three months, Coinbase’s share of the Bitcoin market has risen from 47% to a significant 60%, as reported by Kaiko, a blockchain data provider. This substantial increase highlights Coinbase’s growing influence and the impact of Spot Bitcoin ETF approval on crypto exchange platforms’ market positions.
Coinbase currently acts as a custodian for Bitcoin ETFs by BlackRock, Grayscale, Ark 21Shares, and Franklin Templeton, among others. Additionally, with the anticipation of Spot Ethereum ETFs, it is expected that Coinbase will expand its crypto ETF custodian services.
The surge in Coinbase’s Bitcoin market share has also affected its services recently, leading to a major outage. Coinbase CEO Brian Armstrong attributed the recent outage to the unexpected surge in activity within the cryptocurrency market. He further emphasized that although the team had prepared for a 10x increase in volume, the reality exceeded expectations due to the rally in Bitcoin price, resulting in the crash of the Coinbase app.
Moreover, on February 28 between 12:15 p.m. ET and 12:30 p.m. ET, there was a sharp decline in the price of Bitcoin from $64,000 to $59,000, indicating a 9% swing. This sudden pullback was believed to have been influenced by the outage on Coinbase, leaving users with a $0 balance in their accounts.
Goldman Sachs Raises COIN Stock Rating
On March 7, Goldman Sachs revised its stance on the Coinbase stock, upgrading it from Sell to Neutral. Alongside the shift, the investment firm set a new stock price target of $282 for the cryptocurrency exchange platform. This upgrade reflects recent developments in the crypto market, driven by a significant surge in the Bitcoin price reaching all-time highs.
The rating upgrade coincides with daily trading volumes on Coinbase reaching levels not seen since 2021, prompting Goldman Sachs to increase its revenue estimates for the company by 48% since early February. These heightened volumes have played a crucial role in the firm’s reassessment of Coinbase’s stock.
Goldman Sachs’ revised perspective on the COIN stock is linked to improved performance and adoption metrics in the crypto market. The analyst highlighted the substantial increase in revenue estimates attributed to the recent surge in Bitcoin and altcoin prices and trading volumes.
The new stock price target of $282 signifies a significant departure from the firm’s previous valuation of Coinbase. This update directly responds to current trends in the Bitcoin and overall crypto market and the platform’s trading activity, indicating a more favorable short-term outlook for the CEX.
Hot Take: Coinbase’s Dominance Grows Amid ETF Approval
Following the approval of Spot Bitcoin ETFs, Coinbase has experienced a significant increase in its dominance within the U.S. Bitcoin market. Serving as a custodian for several newly approved Bitcoin ETFs has contributed to this surge. Additionally, Coinbase’s share of the Bitcoin market has risen from 47% to an impressive 60% in just three months.
This rise in dominance highlights Coinbase’s growing influence and emphasizes how ETF approval has impacted crypto exchange platforms’ market positions.
However, this increase in market share has also presented challenges for Coinbase, as it recently faced a major outage due to the surge in cryptocurrency market activity. The unexpected volume exceeded the platform’s preparedness, resulting in app crashes and users experiencing a $0 balance in their accounts.
On the other hand, Goldman Sachs has recognized Coinbase’s potential and upgraded its stock rating from Sell to Neutral. The investment firm has also raised its revenue estimates for the company, taking into account the surging daily trading volumes on Coinbase.
These developments indicate a more positive short-term outlook for Coinbase and reflect the overall growth and adoption of cryptocurrencies in the market.
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