Coinbase: A Prime Beneficiary of Accelerating Crypto Adoption

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Adoption of crypto has been on the rise and recent times have seen some important developments in the space.

For one, last week Bakkt and payments giant Mastercard announced a partnership, which combines Mastercard’s network with Bakkt’s digital asset platform and allows Mastercard customers to buy, sell and hold digital currencies.

Piper Sandler’s Richard Repetto believes this is a bullish signifier not only for crypto in general but to leading crypto exchange Coinbase (COIN).

“We believe this is another example pointing to the greater mainstream adoption of cryptocurrencies central to our positive thesis on COIN and its sole focus on servicing the crypto economy,” the analyst explained.

Bitcoin ETFs (albeit futures) have also been popping up, finally getting the SEC’s approval after years of rebuffs. First came the ProShares Bitcoin Strategy ETF (BITO), followed by the Valkyrie Bitcoin Strategy Fund (BTF) and the Van Eck Bitcoin Strategy ETF (XBTF).

Not only do these benefit Coinbase by bringing “more credibility and attention” to the crypto space, but they also invalidate a theory the SEC is looking to stamp down on crypto. It also means that over time bitcoin futures ETFs will likely lead to higher crypto volumes across the industry.

There are other reasons to be bullish on Coinbase. The long-awaited move into the NFT space is about to happen. Coinbase’ NFT marketplace is anticipated to be piloted in 4Q21 and rolled out next year. Demand has been exceptional; the marketplace waiting list already stands at over 2.4 million.

Given Coinbase’s scale, the analyst expects the company to become a “dominant player” in the NFT space while at the same time diversifying the company’s revenue streams.

Repetto also believes that in contrast to most opinions, 3Q21 volumes should be “better than expected.” As such, the analyst’s 3Q21 EPS estimate of $2.08 is significantly higher than the Street’s forecast of $1.47. Coinbase reports Q3 results on Tuesday, Nov 9 AMC.

Accordingly, all the above results in a new price target; the figure moves from $335 to $360. However, COIN stock has already accumulated gains of 44% over the past month, bringing the shares 3% above Kumar’s target. (To watch Repetto’s track record, click here)

Looking at the consensus breakdown, COIN’s Moderate Buy consensus rating is based on 13 Buys, 3 Holds and 2 Sells. Over the coming months, shares are anticipated to stay range-bound, given the average price target currently stands at $355.56 — a 3% above current levels. (See Coinbase stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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