Coinbase (COIN) stock has experienced notable growth in recent weeks, reclaiming its listing price and currently trading above $252, marking a 60% surge since the beginning of the year.
March 8 witnessed the stock surpassing the $250 threshold for the first time in two years, signaling a remarkable recovery from the depths of the cryptocurrency winter when it plummeted to $33 in 2023. Over the past twelve months, Coinbase stock has seen a continuous ascent, with its prices climbing by over 300%.
This upward trajectory is largely attributed to the performance of Bitcoin, which also reached an all-time high on March 8, briefly touching $70,000 before settling around $68,000. The influx of funds into Bitcoin exchange-traded funds (ETFs) and anticipation surrounding Bitcoin's impending halving are significant drivers behind the cryptocurrency's ascent.
BlackRock’s iShares Bitcoin Trust (IBIT) recently hit $10 billion in assets under management (AUM) on March 1, merely seven weeks post-launch. Coinbase is positioned to benefit from Bitcoin ETF revenues, with its custody arm, Coinbase Custody, partnering with several asset managers that introduced Bitcoin ETFs in January. However, the anticipated costs associated with these partnerships are estimated to range between $25 million to $30 million.
Coinbase's latest earnings call highlighted a robust fourth quarter in 2023, with net revenue reaching $905 million, marking a 45.2% increase from the preceding quarter and surpassing the consensus estimate of $825 million.
JPMorgan analyst Kenneth Worthington recently revised his stance on the stock from underweight to neutral, citing the favorable impact of the Bitcoin ETF on the crypto market. Despite setting a price target of $80 on the stock, which is considerably lower than its current trading value, Worthington's sentiment underscores the potential for higher cryptocurrency prices to bolster Coinbase's performance as it moves towards profitability in Q1 2024.
