Goldman Sachs upgrades Coinbase rating amid crypto surge and market dominance boost

Coinbase, the leading US-based crypto exchange, has seen a surge in its market share following the introduction of several spot Bitcoin exchange-traded funds (ETFs) in January.

In response, analysts at Goldman Sachs have upgraded their rating on Coinbase shares from selling to neutral and adjusted their price target to $282.

Coinbase shares

The bank analysts wrote:

“We are upgrading shares of COIN to Neutral from Sell, as crypto prices have surged to all time highs, and COIN daily volumes have reached levels not seen since 2021 driving a 48% increase to our revenue estimates since early February.”

The analysts explained that their decision reflects the changing landscape of the crypto market and the corresponding impact on Coinbase’s performance.

Previously, JPMorgan analysts had downgraded Coinbase’s stock from Neutral to Underweight due to pressures in the crypto market and potential revenue shifts away from Coinbase following the launch of the new ETFs.

Coinbase’s stock has grown substantially during the past month, trading at around $244 during pre-market trading today, marking a remarkable 105% increase over the past month, according to Yahoo Finance data.

Market share growth

Coinbase’s market dominance has surged from 47% to 60% in the last three months following the approval of Bitcoin ETFs in January, according to data from blockchain analytics firm Kaiko.

The platform’s remarkable growth stems from heightened user engagement, propelling its app to notable rankings. Currently, Coinbase is the 13th most popular US finance application, as tracked by a platform monitoring app growth, Sensor Tower.

However, Coinbase has grappled with technical challenges amid this ascent, resulting in users encountering zero balances in their accounts. Coinbase CEO Brian Armstrong attributed this glitch to the significant spike in traffic caused by the BTC’s ascent to new record highs.

Beyond technical setbacks, Coinbase is also navigating a landscape fraught with regulatory hurdles, particularly with the US Securities and Exchange Commission over the past year.

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