JPMorgan Analyst Concerned about Coinbase’s Future
Last year, Coinbase Global Inc. saw a surge in its stock value due to the anticipation of spot bitcoin ETFs. However, JPMorgan analyst Kenneth Worthington believes this optimism may now turn bearish. He suggests that the introduction of multiple spot Bitcoin ETFs could lead to an overestimation of value and negatively impact stock prices.
Downgrade from JPMorgan
JPMorgan has downgraded Coinbase’s stock from “neutral” to “underweight” due to the declining price of BTC and the introduction of spot Bitcoin ETFs. Worthington believes that the expected impact of these ETFs will disappoint market participants, leading to decreased token prices and reduced trading volume.
He maintains a price target of $80 for Coinbase shares, indicating a possible decrease of over 35% in what he predicts will be a challenging year. The stock dropped by nearly 4% following the downgrade.
Spot Bitcoin ETFs Drive Strong Volumes
Bitcoin ETF issuers, excluding Grayscale, have collectively purchased more than 86,000 BTC at an average cost of $42,000, with a total investment value of $3.63 billion. BlackRock’s iShares leads with over $1.3 billion in BTC holdings, followed by Fidelity with $1.22 billion.
Bitwise and ARK/21Shares hold the third and fourth positions, with assets worth $409.23 million and $364.94 million respectively. Invesco holds approximately $249.49 million in BTC, while VanEck holds around $89.21 million. Valkyrie, Franklin Templeton, and WisdomTree complete the lineup of Bitcoin ETF issuers.
Hot Take: Uncertain Future for Coinbase
The downgrade from JPMorgan and concerns over the impact of spot Bitcoin ETFs have raised questions about Coinbase’s future. With decreasing token prices, reduced trading volume, and potential revenue limitations, the crypto exchange may face a challenging year ahead. Investors will closely monitor the performance of Coinbase shares as the crypto industry continues to evolve.
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