Coinbase Receives Upgrade at JPMorgan Following Bitcoin Rally
Following the recent surge in the price of Bitcoin, JPMorgan upgraded Coinbase (NASDAQ:) from Underweight to neutral on Thursday. The bank maintained an $80 price target on the stock, citing the rise in the Bitcoin price as its reason.
Analysts at JPMorgan pointed out that the increase in the Bitcoin price is expected to elevate both the crypto market and Coinbase’s earnings power, thus justifying the upgrade.
Previously, JPMorgan had expressed concerns about the optimism surrounding the new money flowing into the cryptocurrency market through the newly approved U.S. spot Bitcoin ETFs. However, the analysts at JPMorgan acknowledged that the launch of U.S. Bitcoin spot ETFs has led to substantial Bitcoin price appreciation, contrary to their initial expectations of a sell-the-news event.
The rise in Bitcoin prices has not only led to better spot Bitcoin ETF flows but has also driven Bitcoin prices higher, consequently pulling other tokens along with it. JPMorgan believes that this Bitcoin appreciation will contribute to improved spot Bitcoin ETF flows, leading to higher Bitcoin prices and the subsequent rise of other tokens.
Additionally, with the recent acceleration in flows into Bitcoin ETFs and the significant price appreciation of Bitcoin and Ethereum, JPMorgan anticipates sustained and improved activity levels for Coinbase, further enhancing its earnings power.
