As cryptocurrency prices rebound from their summer lows, companies that profit off trading volatility stand to benefit. Coinbase Global, Inc. (COIN) has continued to stay at the helm of the crypto financial services industry by diversifying its products offered, frequently adding new currencies, and complying with regulatory authorities. (See Coinbase stock charts on TipRanks)
Calling it the “leading provider of financial services, infrastructure, technology, and custodial services for the high-growth, crypto asset universe,” John Todaro of Needham & Co. published his bullish hypothesis.
The analyst rated the stock a Buy, and assigned a price target of $420.
Todaro is confident the rapid expansion of the exchange business will occur, with Coinbase poised to capture a significant portion of it. He writes that COIN has been making a name for itself with both household and institutional users, and is increasing its market share.
Currently, Coinbase’s roadmap includes it releasing several yield-bearing products, and Todaro expects the company to continue offering new assets for staking. This practice is described on Coinbase’s website as “a way of earning rewards for holding certain cryptocurrencies.” Quarter-over-quarter by its Q2 earnings release, staking revenues had increased 271%.
Furthermore, the relatively high fees COIN charges per transaction have not appeared to scare away its user base. Todaro cites a survey that states that users place more priority on the quality of the platform, as well as the ability to trade a variety and availability of cryptocurrencies. He believes that investors’ worries over fees are “misplaced.”
The “one-stop shop for crypto financial services” has been encouragingly secure with its liquidity and platform security, and thus far, has held off high-profile hackers.
On TipRanks, COIN has an analyst rating consensus of Moderate Buy, based on 11 Buy and 3 Hold ratings, and 1 Sell rating. The average Coinbase price target is $355.54.
Disclosure: At the time of publication, Brock Ladenheim did not have a position in any of the securities mentioned in this article.
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