Shares of Coinbase Global (NASDAQ: COIN) were up by around 5% in morning trading on Friday as Daiwa Securities analyst Carlton Lai upgraded the stock to Buy from Outperform.
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Lai expects that the cryptocurrency exchange could be a “key beneficiary of increased ETH staking demand” after ethereum (ETH-USD) switches to a proof-of-stake method from a proof-of-work consensus method later this month.
Analyst Lai pointed out that this was because COIN was one of the largest holders of Ethereum on a global basis holding around 15% of all circulating ethereum on its platform.
The analyst estimates that COIN could generate staking revenues of $554 million in 2023, a jump of 73% year-over-year while staking revenues could comprise 15% of the company’s total revenues by the end of next year versus 9% in Q2 of this year.
Lai anticipates that this would enable “the company diversify its revenue away from more-cyclical trading revenue.”
Is COIN a Buy or Sell?
Analysts are cautiously optimistic about COIN with a Moderate Buy consensus rating based on eight Buys, eight Holds, and two Sells.
COIN’s average price forecast of $102.56 implies that the stock has an upside potential of around 34%
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