Coinbase Global cryptocurrency trading shares were faltering on Thursday, but at least one bullish call from Wall Street encouraged them.
BTIG analysts started hedging on the digital currency platform with a buy rating and a $ 500 target price. Coinbase shares advanced in the opening trade, but have since fallen 1.6%.
“We believe that COIN should be seen as a market leader in a category characterized by rapid and seemingly sustainable growth driven by significant changes in consumer behaviors and their adoption of new technology,” BTIG analysts Mark Palmer told BTIG analysts. and Andrew Harte note.
“As such, we believe that the multiple in which COIN is valued should reflect this distinction as it does for other category leaders with open growth opportunities, such as [videotelephony program] Zoom ZM,
[electric-car maker] Tesla TSLA,
i [cloud computing data company] Snowflake NEW,
“they said. BTIG values companies that buy, unclassified and neutral, respectively.
Coinbase is the “gold standard among digital asset exchanges,” they said. Its “rapid and sustained growth” is approaching as the industry ecosystem expands and institutional adoption increases, they said. Financial services company Visa V,
last month announced plans to liquidate transactions with a “stable currency” backed by the dollar, while Tesla TSLA,
and digital payment companies PayPal PYPL,
and Square SQ,
all offer transaction options in bitcoins or other cryptocurrencies.
Institutional reception and general enthusiasm from individual investors are some of the factors that have contributed to fueling the enthusiasm for the cryptographic space this year, with Bitcoin BTCUSD,
it recently hit new highs above $ 60,000, with a 117% gain so far in 2021.
Coinbase started trading at $ 381 on Wednesday, from a reference price of $ 250, and rose to $ 429.54 before ending at $ 328.28. While some would have liked to see Coinbase hang on these highs, the day still made a 32% gain, meaning it was up to the hype. At its closing price, Coinbase was valued at $ 85.8 billion.
Read: Not everyone gets cryptography. Emilie Choi of Coinbase plans to change that.
BTIG analysts based this $ 500 target price on 16 times the $ 2024 million net revenue for the full year of 2024, following its initial public offering.
“We believe that COIN, the most popular cryptocurrency exchange in the United States, is positioned as the main beneficiary of the growing adoption of bitcoins and other digital assets, as it continues to increase in the United States and internationally,” analysts said. .
They believe the company has several ways to build on its first-push advantage as a “ramp for major cryptocurrency investors,” such as diversifying its revenue stream out of transaction fees, a dependency that creates potential. of volatility as crypto markets fluctuate. In addition, the company can leverage its strong platform for institutional investors, a “key engine of growth in the future,” they said.
The core of BTIG’s bullish view on Coinbase is the company’s market share, which they noted had 11.3% of global cryptocurrency assets as of March 31, compared to 4.8% in 2018. end of the first quarter of 2021, the exchange had $ 223 billion in cryptographic assets on its platform. They also considered it a safe haven between platforms, aided by its strict adherence to compliance with regulations.
If the “total market capitalization of cryptocurrencies continues to grow, going from about $ 2.1 trillion to a significant multiple of that figure, the company’s positive profit could be immense,” the team said. BTIG.
Read: The currency listing has fueled “a big frenzy” and “this never ends well,” Novogratz bitcoin bull told MarketWatch