April 21, 2024 11:56 pm
Oppenheimer Predicts Coinbase Will Gain from Increasing Adoption of Blockchain Technology

In recent years, Coinbase (COIN) has been viewed as a company that stands to benefit from the long-term adoption of blockchain technology. Analysts at broker Oppenheimer believe that this is especially true now that digital asset trading has continued to grow following the approval of spot bitcoin (BTC) exchange-traded funds (ETFs) in January. The research report released by Oppenheimer on Wednesday raised its earnings estimates for the crypto exchange.

Owen Lau and Guru Sidaarth, the analysts behind the report, noted that the adoption of digital assets has grown significantly since their approval. They also highlighted the increasing liquidity in the space, with the average market cap of USD Coin (USDC) reaching $31 billion by the end of Q1 2024. USDC is a stablecoin issued by Circle, which is backed by Coinbase, and the exchange earns gross interest income on USDC outstanding balances.

In light of this positive outlook for Coinbase, Oppenheimer raised its price target for the stock to $276 from $200. As of publication time, Coinbase shares were trading 2.5% higher at $258. While investors should be aware of potential near-term volatility even as they remain optimistic about long-term blockchain adoption, there are some potential headwinds they should be aware of as well, such as risks associated with spot ether (ETH) ETF approval that was previously expected in May but now appears unlikely due to regulatory issues.

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