KBW has raised its price target for Coinbase stock to $230 from $160, highlighting the exchange’s prime positioning for the future expansion of the cryptocurrency market. While maintaining a “market perform” rating, the investment bank’s analysts see a significant near-term revenue opportunity for Coinbase.
In a research report on Tuesday, KBW analysts led by Kyle Voigt highlighted several tailwinds for Coinbase, including inflecting USD Coin (USDC) outstanding balances, elevated crypto asset levels, and an apparent retail re-engagement from trough levels in 2023.
The report highlighted a notable rise in the USDC dollarized supply, showing a 32% increase in the first quarter alone. Since USDC is pegged to USD and issued by Circle, which is affiliated with Coinbase, holding 56% of their USDC balances earns them a gross interest income.
Additionally, high trading volumes are boosting Coinbase’s stock, with March’s average daily volume reaching $5.1 billion, up from $2.4 billion in February.
Analysts note that Coinbase’s legal feud with the SEC and regulatory ambiguity deter institutional investors from considering the stock. KBW’s raised price target signals confidence in Coinbase’s growth prospects amid the cryptocurrency industry’s expansion.
As the digital currency space evolves, Coinbase’s position as a top exchange presents an appealing investment opportunity for those willing to navigate regulatory challenges.
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