Shares of Coinbase have fallen around 45% after reporting earnings alongside a similar-sized fall in crypto's total market cap, due to expectations of higher interest rates and the sell-off in "longer duration, high growth related assets," Goldman Sachs said in a research note published on Wednesday.
- The bank continues to see Coinbase as the "blue-chip way" to gain exposure to the ongoing development of the crypto ecosystem, adding that further progress on new revenue initiatives could lead the stock to "outperform its beta to crypto prices," analysts led by Will Nance wrote in the report.
- Despite the recent volatility in the crypto market, Goldman remains buy-rated on Coinbase shares and continues to see a number of new potential revenue streams.
- Non-fungible tokens (NFT), derivatives and further adoption of staking initiatives could provide additional upside to the bank’s forecast.
- Goldman cut its 12-month price target to $288 from $352, to account for lower crypto prices and a daily average run-rate for volumes of around $4 billion in Q1.
- Downside risks to the bank’s target include weaker crypto prices/lower volatility, commission pressure and the threat of crypto regulation.
- Rival investment bank Mizuho Securities is not so bullish on Coinbase. In a report on Tuesday Mizuho said that it saw "significant downside to consensus revenue expectations."
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