Coinbase (COIN) stock has experienced significant growth in recent weeks, surpassing its listing price and reaching over $252 per share. This marks a 60% surge since the start of the year. After a decline during the crypto winter, where the stock fell as low as $33 in 2023, Coinbase has rebounded to surpass the $250 mark for the first time in two years on March 8. Over the past year, Coinbase shares have risen by more than 300%.
One of the factors contributing to this growth is the performance of Bitcoin, which also hit a record high on March 8, briefly reaching $70,000 before dropping to around $68,000. The rally in the cryptocurrency market is being driven by increased flows from Bitcoin exchange-traded funds (ETFs) and anticipation surrounding Bitcoin’s upcoming halving.
BlackRock’s iShares Bitcoin Trust (IBIT), for example, reached $10 billion in assets under management (AUM) on March 1, just seven weeks after its launch. Coinbase is benefiting from the revenue generated by Bitcoin ETFs through its custody arm, Coinbase Custody. They have partnered with several asset managers that launched Bitcoin ETFs in January and are expected to earn $25 million to $30 million in fees from these products.
Coinbase’s latest earnings call revealed a strong performance in the fourth quarter of 2023. Their net revenue in Q4 reached $905 million, a 45.2% increase from the previous quarter and beating consensus expectations of $825 million. JPMorgan analyst Kenneth Worthington recently upgraded the stock rating from underweight to neutral due to the positive impact of Bitcoin ETFs on the crypto market. Worthington has set a stock target price of $80, which is significantly lower than its current trading price.
The analyst believes that the recent influx of flows into Bitcoin ETFs and the rising prices of both Bitcoin and Ethereum will enhance Coinbase’s activity levels and earnings potential in the first quarter of 2024. Worthington’s revised rating reflects the expectation of sustained growth in the cryptocurrency market and its positive impact on Coinbase’s performance.
Coinbase is definitely benefiting from the increased activity levels in the crypto market!
Coinbase’s growth potential in the first quarter of 2024 is looking really promising!