Coinbase’s (COIN) long-awaited NFT marketplace has gone live. The Coinbase NFT marketplace is initially available in beta to a small number of people who have expressed interest in it and joined the waitlist.
The company has promised to expand its availability over time until everyone can access it. Coinbase is an American company that operates a cryptocurrency exchange platform.
The marketplace not only lets users buy and sell NFTs but t also lets them discover the right communities. It is initially free to trade NFTs on the marketplace, but Coinbase plans to introduce transaction fees in the future.
What Could the NFT Marketplace Launch Mean for Coinbase Stock?
Coinbase stock has declined more than 40% year-to-date. The stock has come under pressure amid concerns that the Fed’s tightening of its monetary measures would cause liquidity problems and reduce crypto transactions. Coinbase makes money from transaction fees. Therefore, a decline in trading volumes can adversely impact its earnings. Indeed, the company cautioned investors in February while releasing Q4 2021 results that 2022 could be difficult for its business.
“We enter 2022 with even more unknowns which make our business all the more difficult to forecast,” Coinbase’s management wrote in a letter to shareholders.
The NFT marketplace could help boost Coinbase’s trading volumes, or at least offset volume weakness in the company’s flagship crypto trading platform. Therefore, the NFT marketplace could potentially remove a major concern that has weighed on COIN stock.
Coinbase Takes on OpenSea
Coinbase has primarily focused on facilitating cryptocurrency trades, becoming the market leader in that space in the U.S. Its move into NFT trades sees it take on the category leader, OpenSea. Although Coinbase is now set to give OpenSea a run for its money, it helped raise it. Coinbase joined other investors, including Blockchain Capital, Foundation Capital, and Stable Fund, to raise $2 million for OpenSea in 2018.
Wall Street’s Take
On April 18, Oppenheimer analyst Owen Lau reiterated a Buy rating on Coinbase but cut the price target to $314 from $377. Lau’s new price target indicates 113.4% upside potential. In reducing Coinbase’s price target, the analyst cited lower trading volume expectations.
The Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 12 Buys, two Holds, and two Sells. The average Coinbase price target of $292.33 implies 98.7% upside potential to current levels.
Blogger Opinions
TipRanks data shows that financial blogger opinions are 79% Bullish on COIN, compared to a sector average of 68%.
Key Takeaway for Investors
With the NFT marketplace launch, Coinbase looks to be making a smart bet. The NFT space presents a lucrative business opportunity. In 2021, global NFT sales hit $25 billion, and the market is forecast to grow to $35 billion in 2022 and hit $80 billion by 2025.
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