Bernstein Calls Coinbase the Most Misunderstood Crypto Stock: Here’s Why
Analyst Boosts Coinbase Price Target, Highlights Growth Potential
Coinbase’s Market Position Strengthened by Analyst Insights
Analyst Gautam Chhugani from Bernstein believes that investors are not fully recognizing the growth potential of Coinbase. He has reaffirmed his “outperform” rating on the stock and increased his price target significantly from $310 to $510 per share. With Coinbase shares closing at $344.82 on Tuesday, this new target suggests a potential upside of around 48%.
Misunderstood Leader in the Crypto Space
Chhugani describes Coinbase as the most underestimated entity within the cryptocurrency sector. He emphasizes that, despite various avenues for growth, the general consensus remains pessimistic about the largest cryptocurrency bank. Coinbase stands out as the sole cryptocurrency company listed in the S&P 500, leading the U.S. market for crypto trading. It also operates the largest stablecoin business among exchanges, dominates institutional trading, and has acquired the biggest global crypto options exchange, in addition to managing the fastest chain on Ethereum, which is pivotal for tokenization.
Resilience Against Competition
The analyst pointed out that Coinbase has consistently defied bearish predictions from analysts, maintaining its market share even in the face of emerging competition. Upcoming crypto offerings from traditional brokerage firms are unlikely to match the comprehensive services provided by Coinbase, making them less competitive.
Legislative Developments Favoring Coinbase
Coinbase is poised to benefit from the GENIUS Act, which aims to establish regulations for the stablecoin sector, as well as the forthcoming CLARITY Act, which seeks to enhance oversight of digital assets. These legislative measures could create a more favorable environment for Coinbase’s operations.
Expanding Opportunities in the Futures Market
Chhugani also highlighted the significant potential for Coinbase in the futures market. He noted that the opportunity for crypto derivatives in the U.S. is vast. Following the introduction of Bitcoin and Ethereum futures trading, Coinbase is preparing to launch perpetual futures trading, further expanding its offerings.
Revenue Projections and Market Reaction
Chhugani’s revised price target is based on an expectation that Coinbase will generate approximately $9.5 billion in total revenue this year. Following the announcement of the increased price target, Coinbase shares experienced a 2% rise in premarket trading, reflecting positive investor sentiment.
