In a research report released on Thursday, JPMorgan (JPM) upgraded the shares of cryptocurrency exchange Coinbase (COIN) to neutral to reflect the recent spike in cryptocurrency prices following the legalization of spot bitcoin (BTC) exchange-traded funds (ETFs) in the United States.According to the analysis, increased cryptocurrency prices should boost Coinbase’s earnings power and activity levels in the first quarter.
Keeping its price estimate of $80 intact, the Wall Street behemoth upgraded the company from underweight to neutral.In early trade, Coinbase’s stock increased 6.5% to $170.80.With bitcoin, the biggest cryptocurrency in the world, trading near its recent highs of $52,400, other stocks tied to cryptocurrencies also saw gains.Marathon Digital (MARA) gained 3.5 percent, while MicroStrategy (MSTR) increased by 3%.The bank stated that what was once a sell-the-news event—the introduction of spot bitcoin ETFs—has now evolved into a significant increase in value of bitcoin.
“We think this bitcoin appreciation is contributing to better spot bitcoin ETF flows, which is in turn driving bitcoin prices higher, and pulling other tokens higher as well,” analysts led by Kenneth Worthington wrote.
According to the bank’s valuation estimate, Coinbase shares could underperform in 2024 after experiencing a near-400% spike in price last year.“Although we do not currently recommend the stock, we do recognize the positive impact that U.S. spot bitcoin ETF activity and volumes have had on the industry, helping it to overcome its 2022 crypto winter,” the report continued.Following today’s close, the corporation releases its earnings.