Bank of America analysts upgraded Coinbase to “Buy” from “Neutral” on Thursday, describing the exchange as a leader in tokenization that stands to benefit from its own blockchain network.
Without changing their price target of $340 per share, the bank’s analysts wrote in a note that the exchange’s outlook improved following its debut of several products last month. Stock trading and predication markets are among those that could broaden revenue, they wrote.
Still, as asset managers grow increasingly interested in issuing digital representations of securities like exchange-traded funds, the analysts argued that Coinbase is in a unique position compared to its competitors, highlighting a non-consumer-facing product.
If a native currency debuts for Base, then the exchange itself would likely benefit, the analysts wrote, describing the token’s debut as an effective windfall for the crypto exchange. They noted, however, that the token would primarily serve as a way to incentivize builders, creators, and early adopters to use the network, while boosting its decentralization.
“While part of the native token launch will go towards incentivizing COIN's partners, COIN will keep some of the cash proceeds for itself,” they wrote. “This could raise billions of dollars in cash given its current $5 billion in total value locked.”
“If global regulatory oversight harmonizes, there could be an opportunity for Binance.US to tap into the liquidity of its larger non-U.S. entity,” the analysts wrote. “Some investors we spoke with view Binance as potentially attractive due to its relatively greater liquidity, lower fees, and broader range of derivatives.”
