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KBW Raises Coinbase Price Target to $230, Highlighting Potential for Long-Term Growth in Cryptocurrency Market
Investment banking firm KBW has praised Coinbase for providing investors with a distinctive chance to access the long-term growth potential of the cryptocurrency economy and has raised its price target for COIN to $230.
In a recent research report, KBW elevated its price target for Coinbase from $160 to $230 while retaining its market performance rating.
The stock closed at $245.84 on Tuesday and has seen a significant year-to-date rise of over 40%.
Analysts Show Confidence in Coinbase’s Revenue Outlook
In the report, analysts led by Kyle Voigt expressed confidence regarding Coinbase’s revenue outlook in the short term.
They pointed out the potential revenue opportunities stemming from the increasing outstanding balances of USD Coin (USDC), a stablecoin issued by Circle and supported by Coinbase.
“We identify a substantial near-term revenue opportunity from rising USD Coin (USDC) outstanding balances, heightened crypto asset levels, and a noticeable retail re-engagement from low points in 2023.”
The report noted that USDC outstanding balances increased by 32% in the first quarter.
Coinbase generates gross interest income on roughly 56% of these outstanding balances, further aiding its revenue growth.
The report also highlighted the beneficial effect of rising trading volumes on Coinbase’s stock performance.
In March, the average daily volume (ADV) reached $5.1 billion, up from $2.4 billion in February.
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Investment bank KBW has adjusted its target stock price for Coinbase (COIN) from $160 to $230, reflecting heightened optimism regarding the company’s future. This increase is linked to various factors, including the ongoing cryptocurrency bull market, interest income…
— BitcoinWorld Media (@ItsBitcoinWorld) April 3, 2024
Increased trading activity indicates a rising interest among investors in cryptocurrencies and further strengthens Coinbase’s market position.
Nonetheless, the research report recognized the challenges Coinbase encounters, including its legal dispute with the U.S. Securities and Exchange Commission (SEC) and the unpredictable regulatory landscape.
These issues complicate the decision for many institutional investors regarding the ownership of Coinbase stock.
SEC’s Case Against Coinbase Progresses
Last week, Judge Katherine Polk Failla of the US District Court for the Southern District of New York ruled that the SEC’s lawsuit against Coinbase may move forward.
This ruling followed Coinbase’s motion to dismiss the SEC case, which involves allegations that the exchange operates as an unregistered securities exchange, broker, and clearing agency.
In her ruling, Judge Failla stated that the SEC’s lawsuit against Coinbase had “plausible” grounds.
“The Court finds the SEC has adequately alleged that Coinbase functions as an exchange, as a broker, and as a clearing agency under federal securities laws, and through its Staking Program engages in the unregistered offer and sale of securities,” the court document indicated.
However, she granted a partial victory to the exchange against the regulator by dismissing the SEC’s claims concerning Coinbase’s Wallet.
The judge determined that the regulator’s claims “fail for the independent reason that the pleadings do not sufficiently demonstrate that Coinbase acts as a ‘broker’ by providing Wallet to customers.”
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