Reassessment of Coinbase
If you’re following Coinbase, you should know that JPMorgan Chase & Co. has reevaluated the company, downgrading its rating to ‘underweight.’ This decision was based on doubts about the U.S. market’s ability to handle the recently approved spot Bitcoin exchange-traded funds (ETFs).
Changing Market Outlook
In a surprising shift, JPMorgan, a financial powerhouse, has altered its view of Coinbase from ‘neutral’ to ‘underweight.’ Although Coinbase experienced impressive profits in the past year, the bank anticipates challenges in 2024. The lead analyst, Kenneth Worthington, also highlighted potential difficulties for the popular cryptocurrency exchange.
Dim Predictions
JPMorgan’s latest projection sets a price target of $80 for Coinbase stock, signaling a projected 38% decrease over the next year. This downgrade marks a notable departure from the bank’s more positive coverage initiated in May 2021. Following this news, Coinbase shares suffered a 4.1% fall, settling at $122.90 in pre-market trading.
SEC’s Approval Concerns
Despite initial anticipation that the Securities and Exchange Commission’s (SEC) approval would attract mainstream investment, JPMorgan is now worried. The bank fears that disappointment in ETF fund flows could trigger a decline in overall market sentiment. Worthington notes the potential consequences: “lower token prices, trading volume, and ancillary revenue” opportunities for platforms like Coinbase.
…But Others Differ
Despite JPMorgan’s negative perspective, investment firm Wedbush is more optimistic. In a report from January 11, Wedbush suggested that Coinbase is likely to benefit from the SEC’s approval of spot Bitcoin ETFs.
Hot Take: Implications of JPMorgan’s Recent Downgrade
What does JPMorgan’s recent downgrade of Coinbase mean for the crypto market? This surprising shift in assessment raises important questions about the future of cryptocurrency trading and investing in the U.S. Keep an eye on how these predictions and divergent opinions play out in the coming months, as they may impact your investment decisions.
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