JPMorgan has upgraded Coinbase (NASDAQ: COIN) from Underweight to Neutral, attributing the move to the surge in the price of Bitcoin. The bank maintains a $80 price target on Coinbase, emphasizing that the rise in Bitcoin prices contributes to the overall positive momentum in both the cryptocurrency market and Coinbase’s earnings potential.
Previously, JPMorgan expressed concerns that the optimism surrounding Bitcoin in the past three months was driven by unrealistic expectations related to new funds entering the cryptocurrency market through recently approved and launched U.S. spot Bitcoin ETFs.
However, the bank notes that what initially seemed like a “sell-the-news” event following the launch of U.S. Bitcoin spot ETFs has now transformed into substantial Bitcoin price appreciation. According to JPMorgan analysts, this appreciation is not only driving improved flows into Bitcoin ETFs but is also lifting the prices of other tokens.
In light of the recent influx of funds into Bitcoin ETFs and the notable price increases in both Bitcoin and Ethereum, JPMorgan expects higher cryptocurrency prices to sustain and enhance activity levels, thereby boosting Coinbase’s earnings potential.