JPMorgan predicts Coinbase to encounter challenges as Bitcoin and ETF enthusiasm wanes
Coinbase, the popular cryptocurrency exchange, may encounter difficulties in the face of declining Bitcoin values and waning interest in Bitcoin ETFs, according to insights provided by JPMorgan Chase & Co.
On Tuesday, Coinbase’s shares took a significant hit, plummeting by 6.2%. This downward trend followed JPMorgan’s decision to issue its first negative assessment of the company, giving it a “sell” rating. JPMorgan has been tracking Coinbase’s stock since May 2021.
Despite experiencing a remarkable surge of nearly 400% by the end of 2023, Coinbase’s shares have mirrored the trajectory of Bitcoin. In 2024, the value of Coinbase’s shares has dropped by 30%, while Bitcoin’s value has fallen by approximately 8%, recently trading below $40,000.
Analysts at JPMorgan predict a further decline in enthusiasm for cryptocurrency ETFs, which could lead to lower token prices, decreased trading volumes, and fewer opportunities for secondary revenue for entities like Coinbase. These analysts also believe that the hype surrounding ETFs that propelled Bitcoin out of the crypto winter will ultimately fall short of the expectations of the bull market.
The outlook for Coinbase is becoming increasingly cautious, with the stock receiving 12 sell ratings, eight buy ratings, and eight hold ratings, as compiled by Bloomberg. Just last week, CFRA downgraded its rating to “sell,” citing concerns about intensifying market competition.
