As Bitcoin traded higher, Coinbase shares gained as much as 7.8% following the update.
Bitcoin’s recent rally, which pushed its price to the $52,000 level, has positively impacted shares of US-based cryptocurrency exchange Coinbase (COIN).
After experiencing a notable drop to $115 in early February, Coinbase shares rose to $172 on Thursday, following a significant upgrade from a JPMorgan analyst.
Improved Outlook for Coinbase amid Crypto Rally
According to a Bloomberg report, JPMorgan analyst Kenneth Worthington abandoned his bearish view on Coinbase weeks after downgrading the stock. Worthington believes the exchange will likely benefit from the recent rally in digital asset prices, prompting him to change his rating to neutral.
This change in stance comes after Worthington’s downgrade in January, where it predicted a possible deflation of enthusiasm for Bitcoin exchange-traded funds (ETFs). However, contrary to its previous forecast, Bitcoin ETFs have been successful in terms of trading measures, and the price of Bitcoin has surpassed $52,000, reaching its highest level since 2021.
Coinbase stock saw an 8% drop at the start of the year, following an impressive 400% rise in 2023. Analyst opinions on the stock remain divided, with buy, hold, and sell recommendations split roughly evenly. Worthington maintained his $80 price target on the stock ahead of the company’s earnings report, which will be released after the market closes on Thursday.
The analyst emphasized that Coinbase’s business is closely tied to token prices, and its primary revenue is based on transactions. As token values rise and trading activity gains momentum, fees based on the value traded are expected to drive higher transaction volumes, ultimately helping to improve Coinbase’s revenue.
Bitcoin ETFs Witness Significant Trading Volume
On February 14, Bitcoin ETF trading volume showed notable numbers, with Blackrock’s IBIT leading the way with $721 million in volume. Grayscale’s Bitcoin Trust (GBTC) followed closely with $619 million, while Fidelity’s FBTC secured third place with $456 million.
Ark Invest accumulated a volume of $169 million. The total trading volume of the nine ETFs amounted to approximately $1.5 billion. In particular, the largest ETFs saw higher trading volume than the previous day, with IBIT surpassing $700 million and GBTC surpassing $600 million.
Interestingly, before the trading session, GBTC sent less than half of the Bitcoin it sent to Coinbase the previous day. Despite this decline, GBTC’s total trading volume was 50% higher.
As demand for Bitcoin continues to rise, ETFs play a crucial role in facilitating institutional and retail investors’ participation in the cryptocurrency market. The increased trading volume of Bitcoin ETFs highlights growing investor interest and confidence in digital assets.
Regarding predictions about Bitcoin, experts express their opinions. Anthony Scaramucci, founder of SkyBridge Capital, despite regulatory hurdles, is bullish on Bitcoin and maintains his forecast for a significant price rise.
Tuur Demeester, economist, investor and CEO of Adamant Research, raises the perspective that the current bullish cycle of Bitcoin (BTC) could surpass previous ones, with a possible notable increase in the price of the cryptocurrency.
The current situation of the bull market, although similar to the previous ones, according to the economist, has the advantage that this time the cycle will be much longer and should extend well beyond 2024, with a possible realization of profits in the halving. Demeester’s thesis coincides with what other analysts say, such as the Colombian Juan Rodríguez, who also believes that a second phase of the rally is approaching in which retail investors will have a greater participation.
By Audy Castaneda
