Coinbase shares set to fall 40% even if Bitcoin ETFs are approved, says Bank of America

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Coinbase’s recent rally will not be supported by second-quarter earnings or bitcoin ETF endorsement, according to Bank of America. Coinbase’s core business has been under pressure over the past year, with trading volumes remaining low as bitcoin and other cryptocurrencies are stuck in a bear market. The company has also been sued by the Securities and Exchange Commission in a massive crackdown on the crypto industry. But the stock has rebounded strongly over the past month, apparently boosted by bitcoin ETF demands from BlackRock and other asset managers. Some of the proposals ask Coinbase to serve as a depository and monitoring partner. Bank of America analyst Jason Kupferberg threw cold water on that rally in a note to clients on Thursday, reiterating his underperformance rating and warning that projected earnings don’t justify the stock price. , even if the SEC changes course and approves ETFs. “Despite Q2 data suggesting COIN will significantly miss high-level estimates, COIN shares are up around 60% since 6/15 on news of spot Bitcoin ETF applications by Blackrock and Assuming these claims are approved, the magnitude of the P&B benefit to COIN may not be as large as the actions appear to imply, and the SEC lawsuit against COIN is pending. course,” Kupferberg said. COIN 3M mountain Coinbase shares have rallied strongly since mid-June. In fact, the approval of bitcoin ETFs could harm Coinbase if their customers switch to using ETFs instead of trading the cryptocurrency directly on the exchange, Kupferberg said. Kupferberg raised his price target on Coinbase but only $2 per share to $49. That’s about 43% below the level where the stock closed on Wednesday. Also on Thursday, Barclays downgraded the stock to underweight from equal weight. The company has not yet announced the date of its second quarter results. CNBC’s Michael Bloom contributed reporting.

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