According to CoinDesk, JPMorgan Chase pointed out in a research report this week that the launch of the Bitcoin spot ETF was the main driving force for the cryptocurrency market last year. However, the report believes that the launch of a Bitcoin spot ETF before 2024 could reverse the trend and trigger investor disappointment. Additionally, JPMorgan downgraded exchange Coinbase and set a price target of $80.
JPMorgan Chase downgrades Coinbase, worried that ETFs are disappointing investors
JPMorgan Chase downgraded Coinbase from neutral to underweight and set a target price of $80. Although Coinbase has made progress in many key areas, 2024 may face more challenges. Last year, Coinbase’s stock price rose 390%.
The report points out that although Coinbase is still considered the dominant exchange in the U.S. cryptocurrency ecosystem and the leader in global cryptocurrency trading and investment, we believe that the Bitcoin ETF may not be the catalyst to push the market out of the winter. , which may disappoint market participants.
JPMorgan Chase is even more worried that "any disappointment in ETF capital flows may weaken the enthusiasm for promoting cryptocurrency gains."
Coinbase Stock Price Performance
Coinbase stock price has risen since a low of $31 early last year and reached a high of $187 in December. However, subsequently, with the launch of the Bitcoin spot ETF and the decline of Bitcoin selling the news, the stock price continued to decline. Shares fell 3.14% yesterday to close at $124.19, and are down 28% so far this year. Still, it's still some way off JPMorgan's $80 price target.
During its rise, Ark’s flagship fund ARKK also continued to sell Coinbase shares in order to rebalance.
Can a Bitcoin spot ETF bring stable income to Coinbase?
Coinbase previously announced its third-quarter financial report. Due to the decline in the overall cryptocurrency market, cryptocurrency trading volume fell to $76 billion in the third quarter, resulting in a drop in transaction-related revenue to $290 million. However, due to proper cost control, the net loss has gradually narrowed, and Coinbase stated that it will generate meaningful adjustment profits in 2023!
Coinbase plays an important custody role in the Bitcoin spot ETF. With the official listing of the Bitcoin spot ETF, and the Ethereum spot ETF that is waiting in line for SEC approval, it is expected to be able to bring in Many stable sources of income. However, what are the exact numbers? We can only wait for Coinbase’s first quarter financial report this year. For an exchange that is still losing money, how much its stock price is worth depends on investors’ expectations of its future profits!
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