© Reuters. Coinbase Stock Target Raised as Analyst Expects Strong Bitcoin ETF Inflows
Analysts at JMP Securities raised their price target for Coinbase (NASDAQ:) from $200 to $300, citing expectations of strong inflows into spot Bitcoin exchange-traded funds (ETFs).
“We estimate $220 billion of flows into spot Bitcoin ETFs over the next three years, multiples of what has already been experienced; “Coinbase remains well positioned if we are correct,” the analysts wrote in the note.
Analysts maintained an Outperform rating on the stock.
JMP analysts for the first time expressed their optimistic view on the impact of a potential Bitcoin spot ETF on the cryptocurrency market and Coinbase's role within it in December 2023.
Contrary to the prevailing belief that such an ETF would negatively affect exchanges like COIN, they anticipated an opposite effect. Notably, JMP believed this view was flawed and overlooked the crypto exchange's unique position and evolving business model in the broader crypto ecosystem.
Furthermore, the analysts and their team believe that the current activity and flows into Bitcoin ETFs are likely just “the tip of the iceberg.”
“We estimate that after ~$10 billion in flows to date, two months after launch, flows will actually continue to grow materially from now on for years to come, as the approval of the ETF is just the beginning of a longer capital allocation process,” analysts wrote,
In this regard, the broker sees Coinbase, and a handful of its peers, as “significant beneficiaries of the additional capital flows” expected to enter the space.
With only a few companies possessing the technical expertise and scale necessary to facilitate the entry and success of others in the digital asset space, JMP analysts see Coinbase “currently well positioned to participate in many growth areas in an industry that we estimate will grow by multiples over the next decade.”
