Coinbase (COIN) is more than just a cryptocurrency exchange; its ancillary businesses continue to gain momentum, JMP Securities said in a research report on Thursday.
Analysts led by Devin Ryan said: “As the market matures, price increases generally correlate with activity, and we still estimate that there is significant growth opportunity in the currency business.” Ta.
JMP notes that Coinbase's daily spot trading volume averaged approximately $3.3 billion in the first quarter, more than doubling from the fourth quarter of last year. The newly launched derivatives platform is also “expanding at an incredible pace.”
“Yet, compared to the growth opportunities in exchange and custody services, we believe there are equally exciting opportunities in the development of today's blockchain use cases, and we believe Coinbase will continue to We look forward to participating in much of the evolution,” the authors write.
Those opportunities include participating in the tokenization of real-world assets, such as the one recently announced. partnership Payment activities include partnership with Blackrock (BLK), venture business with stablecoin issuer Circle, and Web3 development; decentralized app (dapps), and staking, the report said.
Coinbase can participate in much of the future growth and innovation in this space by working with TradFi companies that are looking to engage with digital assets rather than competing with them, the report added.
The broker continues to see the adoption of spot Bitcoin exchange-traded funds (ETFs) as an important catalyst for the market, but notes that “the ETF flow is unlikely to be smooth, especially given the temporary sell-off related to GBTC.” “It probably won't happen.”
The firm estimates that the approximately $25 trillion of capital associated with traditional wealth management has yet to enter the market in large numbers, but says it is optimistic about the opportunity.
JMP has a Market Outperform rating on Coinbase stock and a $300 price target. The stock closed Thursday at $262.
read more: JPMorgan says Ether could be a meaningful revenue driver for Coinbase
