Analysts at JMP Securities have increased their price target for Coinbase (NASDAQ:COIN) from $200 to $300, citing anticipated strong inflows into spot Bitcoin exchange-traded funds (ETFs).
In a recent note, the analysts highlighted expectations of approximately $220 billion in flows into spot-Bitcoin ETFs over the next three years, significantly surpassing previous levels. They believe Coinbase is well positioned to benefit from this influx if their projections prove accurate.
Maintaining a Market Outperform rating on the stock, the analysts reiterated their optimistic stance on Coinbase’s role within the crypto market. They first expressed this view in December 2023, countering the prevailing belief that a spot-Bitcoin ETF would adversely impact exchanges like COIN. Instead, they argued that Coinbase’s unique position and evolving business model in the crypto ecosystem could lead to positive outcomes.
Contrary to the notion that ETF approval would mark the peak of capital inflows, analysts anticipate continued substantial growth beyond the initial $10 billion in flows. They view this approval as the start of a longer-term process of capital allocation, with flows expected to increase significantly over the coming years.
Considering these factors, JMP Securities identifies Coinbase, along with a select group of peers, as primary beneficiaries of the anticipated capital inflows. They emphasize Coinbase’s technical expertise and scale, positioning the company to facilitate entry and success for others in the digital asset space.
Overall, analysts view Coinbase as well-positioned to capitalize on the expected growth in the digital asset industry, which they estimate will experience substantial expansion over the next decade.