Peter Christiansen has set a price target of $415 for COIN — and based on current levels, that would be a surge of 28%.
Coinbase’s share price has been given a boost after a Citi analyst revealed that he is feeling bullish on the stock.
He described the exchange as “crypto’s general store,” citing the trading platform’s importance in delivering exposure to retail and institutional investors.
Although there have been concerns that Coinbase’s revenues are too reliant on transaction fees, Citi noted that the publicly listed company is now making a concerted push to diversify.
For example, the exchange has unveiled plans to launch an NFT marketplace in recent weeks — a venture that will put it into direct competition with OpenSea.
Such expansion could prove crucial to Coinbase’s profitability, not least because of fears that an ever-increasing number of exchanges could prompt a “race to the bottom” when it comes to transaction fees.
There’s Always a But…
Christiansen did praise Coinbase for adopting a “lean forward approach” to regulation — even though the company has previously been exasperated by the U.S. Securities and Exchange Commission blocking the launch of a new lending product.
However, the analyst did warn that COIN could expect “a high degree of volatility” in the coming weeks and months — and this would likely coincide with dramatic fluctuations in earnings, coinciding with peaks and troughs in the crypto market.
Whereas it can be relatively easy to project a company’s performance a few quarters down the line, the inherent uncertainty surrounding Bitcoin’s price movements mean that an exchange’s future potential is harder to track.
It is worth noting that surges and downturns can be equally beneficial for Coinbase — not least because both events cause trading volumes to spike.
This lackluster debut has undercut the narrative that Coinbase could have been a practical investment for traders who want exposure to crypto without owning Bitcoin itself.
In other developments, there are also concerns that Robinhood’s popularity is diminishing as the meme stock craze — and appetites for assets such as Dogecoin — diminishes.
JPMorgan cited data from Apptopia that indicated app downloads and daily active users have nursed double-digit falls in the third quarter.
Robinhood is due to release its Q3 results after the closing bell on Tuesday.