Coinbase Global’s cryptocurrency exchanges faltered on Thursday, but at least one bullish call from Wall Street cheered them up.
BTIG analysts initiated hedging on the digital currency platform with a buy rating and a target price of $ 500. Shares in Coinbase went higher in opening transactions, but have since fallen by 1.6%.
“We believe that COIN should be considered a market leader in a category characterized by rapid and seemingly sustainable growth, driven by significant changes in consumer behavior and the adoption of new technologies,” BTIG analysts Mark Palmer and Andrew Harte told clients. Note.
“As such, we believe that the multiple at which the COIN is evaluated should reflect this distinction, as is the case for other category leaders with open growth opportunities, such as [videotelephony program] Zoom ZM,
[electric-car maker] Tesla TSLA,
and [cloud computing data company] Snowflake Snow,
“BTIG evaluates those companies that buy without valuation and, respectively, neutral.
Coinbase is “the gold standard in digital asset trading,” they said. “Sustained rapid growth” comes as the industry ecosystem expands and institutional adoption grows, they said. Financial services company Visa V,
last month announced plans to settle transactions in a “stable currency” supported by the dollar, while Tesla TSLA,
and PayPal PYPL digital payment companies,
and Square SQ,
all offer trading options in bitcoin or other cryptocurrencies.
The institutional embrace and general enthusiasm of individual investors are among the factors that contributed to fueling the enthusiasm for the cryptographic space this year, with bitcoin BTCUSD,
recently reached new records of over $ 60,000, with a gain of 117% so far in 2021.
Coinbase started trading at $ 381 on Wednesday, up from $ 250, and rose to $ 429.54 before closing at $ 328.28. While some would have liked to see Coinbase hanging on to those highs, the day still gained 32%, which means it lived up to the hype. At its closing price, Coinbase was valued at $ 85.8 billion.
Read: Not everyone gets crypto. Emilie Choi, Coinbase, intends to change that.
BTIG analysts have determined that the $ 500 target price is 16 times the company’s net income for the full year 2024 of $ 8.2 billion, following its initial public offering.
“We believe that COIN, the most popular cryptocurrency exchange facing US consumers, is positioned as the main beneficiary of the increased adoption of bitcoin and other digital assets as it continues to expand in the US and internationally,” they said. said analysts.
They believe the company has several ways to develop its prime-mutant advantage as an “on-ramp for major cryptocurrency investors,” such as diversifying its revenue stream away from transaction fees, a potentially addictive dependency. volatility as crypto markets fluctuate. The company can also use its robust platform for institutional investors, a “key engine of future growth,” they said.
Underlying BTIG’s optimistic view of Coinbase is the company’s market share, which they said they held 11.3% of global cryptocurrency assets as of March 31, up from 4.8% in 2018. At the end of the first quarter of 2021, the stock exchange held $ 223 billion in cryptocurrency assets on its platform. They also considered it a safe port between platforms, helped by strict compliance with regulations.
If “the total market capitalization of cryptocurrencies continues to grow, rising from about $ 2.1 trillion to a significant multiple of that figure, then the company’s advantage could be huge,” said the BTIG team.
Read: Coinbase’s listing has fueled “a lot of frenzy” and “it never ends well,” Bull Market Novogratz tells MarketWatch