#CoinbaseDowngrade #BitcoinETF #CryptoMarket #JPMorgan #CryptoInvesting #BTCValue #CryptoAnalysis #COINShares
Over the previous year, thanks to the optimism around the anticipated introduction of spot Bitcoin ETFs, the stocks of Coinbase Global Inc., experienced a significant surge. However, Kenneth Worthington, an analyst with JPMorgan, is now of the opinion that the optimistic trend may take a bearish turn. He refutes previous speculations indicating the potential for large profits in the crypto sector due to the new ETFs, calling them a “mirage.”
Earlier, the investment bank JPMorgan had categorized COIN stocks with a “neutral” rating, anticipating a price target of $80 by December 2024. The bank also stated that multiple listings of spot Bitcoin ETFs could have a significant impact on the industry, possibly leading to an overestimated value that could negatively affect stock prices.
The news is out that Coinbase’s stocks have received a downgrade from JPMorgan analyst’s – from “neutral” to ‘underweight.” This re-rating revolves around the declining price of BTC and the newly emerging spot Bitcoin ETFs.
Worthington suggested that the impact of the newly launched spot Bitcoin ETFs – which were thought to be a factor that could revive the cryptocurrency market – may disappoint market players. In the latest appraisal, he pushed Coinbase’s stock (COIN) rating from neutral to underweight, indicating a possible further reduction in the enthusiasm for crypto ETFs.
This could conceivably lead to falling token prices and reduced trading volumes, thereby affecting the prospects of additional revenue on platforms such as Coinbase. Worthington still maintains a price target of $80 for Coinbase shares, suggesting a potential decrease of over 35%. Coinciding with his forecast, the stock experienced almost a 4% drop in Tuesday’s trading.
Worthington notes, “While it’s been just about a week since the Bitcoin ETF’s launch, the initial net inflows into the sector are lower than what the cryptocurrency community was promoting in the financial media. The inflow is quite less in comparison to the first week of flows into the Gold ETF when it was launched in 2004.”
Following this downgrade, 11 out of 27 analysts tracked by FactSet now see Coinbase shares with bearish ratings, while eight are bullish, and another eight recommend a hold.
Bitcoin ETF issuers, with the exception of Grayscale, have collectively bought more than 86,000 BTC at an average price of $42,000, raising the total investment to $3.63 billion. iShares from BlackRock and Fidelity are boasting top position in terms of BTC holdings, valued over $1.3 billion and $1.22 billion, respectively. Bitwise and ARK/21Shares secure the ensuing positions holding assets worth $409.23 million and $364.94 million, respectively. Invesco, VanEck, Valkyrie, Franklin Templeton, and WisdomTree complete the lineup, contributing to Bitcoin ETF issuers’ diversity in the market.
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