Coinbase Stock Sees Uptick After JPMorgan Upgrade on Sustained Bitcoin Momentum
Coinbase Global (COIN) investors received a welcome boost today as the stock jumped 10% after receiving a rating upgrade from prominent investment bank JPMorgan. This bullish shift highlights the potential of COIN given its strong links to the current surge in Bitcoin price.
JPMorgan Analyst Kenneth Worthington Flips to Neutral on COIN:
Previously bearish on COIN, Worthington upgraded the stock to “neutral” from “underweight” as Bitcoin touched $52,400. This change of heart stems from his observation that the introduction of Bitcoin ETFs, initially feared to be a “sell-the-news” event, has instead fueled significant price appreciation for the underlying asset. This bullish trend translates to improved earning power for crypto companies like Coinbase.
Worthington further elaborated, “We see higher cryptocurrency prices not only sustaining but improving activity levels and Coinbase’s earnings power as we look to 1Q24.” This optimism aligns with recent positive signals from crypto broker Robinhood, where customer preference for direct Bitcoin spot trading over ETFs hints at continued revenue potential for Coinbase’s core business.
Coinbase: Q4 Earnings & Strong Bitcoin Correlation Fuel Optimism:
Investors are also eagerly awaiting Coinbase’s Q4 2023 earnings call, following the company’s Q3 2023 success. Q3 saw Coinbase exceed top-line estimates with a 14.2% annual revenue increase to $674.2 million. Additionally, its custody business is well-positioned for growth, having been chosen by a prestigious lineup of Bitcoin ETF providers.
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Coinbase’s close correlation with Bitcoin price is another reason for investor confidence. The stock price skyrocketed 62% in November 2023, preceding the US Securities and Exchange Commission’s approval of Bitcoin ETFs.
Technical Analysis Points to Potential Breakout:
Technical analysis further strengthens the bullish case for COIN. Yesterday, the stock price broke through the 0.618 Fib retracement resistance level at $160, potentially signaling a breakout. RSI also reinforces this optimism, having moved above 50. If COIN surpasses the next hurdle at $187, it could experience a significant upward jump with minimal resistance until $232.
Key Takeaways:
- JPMorgan’s upgrade to “neutral” reflects optimism about COIN’s potential due to sustained Bitcoin momentum.
- Coinbase’s Q4 earnings and strong custody business position it for further growth.
- Technical analysis suggests a potential breakout for COIN, fueled by positive investor sentiment.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.
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