Skip to main content

Market Overview

Coinbase Headed To $600 — Why Analyst Sees Crypto Exchange As 'Must-Own Stock' For Growth, Tech Buyers

Share:
Coinbase Headed To $600 — Why Analyst Sees Crypto Exchange As 'Must-Own Stock' For Growth, Tech Buyers

An analyst described shares of Coinbase Global Inc (NASDAQ: COIN) as a “must-own” ahead of the cryptocurrency exchange’s record direct listing Wednesday.

What Happened: MoffettNathanson analyst Lisa Ellis told Yahoo! Finance the shares of Coinbase could touch the $600 level, which is a 82.8% appreciation from the $328.28 closing on Wednesday.

Ellis said she was positive on the outlook for cryptocurrencies “as a massively disruptive technology.”

“Coinbase, as the only U.S.-listed large-cap stock and the market leader in the space, is really a must-own asset if you're a growth or tech-oriented [investor] with a multiyear time horizon,” Ellis told Yahoo! Finance.

See also: How to Buy Coinbase IPO (COIN) Stock

Coinbase shares ended Wednesday 13.83% lower than their opening price but 78.3% higher than the $250 reference price assigned for the direct listing by the Nasdaq a day earlier.

Why It Matters: Ellis justified her $600 price target by applying a 20-times forward multiple to Coinbase’s 2023 revenues, which is in line with other tech peers, as per Yahoo! Finance.

Ellis’ number also factors in a 35% fall in cryptocurrency transactions for next year, based on an assumption that Bitcoin (BTC) will be less exuberant in 2022 than in 2021 due to its historical boom-and-bust cycles.

BTC and the second-largest cryptocurrency by market cap Ethereum (ETH) both all-time highs on Tuesday. They’ve since touched new highs of $64,863.10 and $2,480.85 on Wednesday.

BTC and ETH traded 0.28% and 7.97% higher at $63,357.78 and $2,477 respectively at press time.

See Also: Elon Musk Launches Dogecoin To The Moon (Yep, Again - Who's Counting?)

“With Coinbase, because of their tie to the crypto markets, it's going to be a bumpy ride,” said Ellis.

The analyst reportedly warned investors they need a “strong stomach.” On the 35% drop in trading volumes she projected for 2022, she said it was based on BTC’s fall in 2018 post hitting an all-time high in 2017.

However, Ellis noted that the next fall may be less severe due to “institutional holdings.”

Price Action: Coinbase shares closed 31.31% higher at $328.28 in regular trading on Wednesday and rose nearly 3%in after-hours to $338.

Read Next: Cathie Wood Trims Tesla Stake And Loads Up Heavily On Coinbase

Photo by Marco Verch on Flickr

Latest Ratings for COIN

DateFirmActionFromTo
May 2021MizuhoMaintainsNeutral
Apr 2021BernsteinInitiates Coverage OnMarket Perform
Apr 2021MizuhoInitiates Coverage OnNeutral

View More Analyst Ratings for COIN
View the Latest Analyst Ratings

 

Related Articles (COIN + $BTC)

View Comments and Join the Discussion!

Posted-In: Bitcoin Cryptocurrency ExchangesAnalyst Color Cryptocurrency Long Ideas Markets Analyst Ratings Trading Ideas Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com