Coinbase Gains Uniquely from Crypto Growth: KBW

The broker's price estimate for Coinbase was increased from $160 to $230. The broker thinks the cryptocurrency exchange gives a special opportunity to profit from the crypto economy's potential for sustained expansion.  

According to the research, Coinbase's trading activity has been steadily increasing, with an average daily volume of $5.1 billion for March.  

According to a research report released on Tuesday by KBW, Coinbase (COIN) provides investors with a distinct opportunity to witness the expansion of the crypto economy over the long run.  

Keeping its market perform rating, KBW increased its price objective for Coinbase from $160 to $230. On Tuesday, the stock of the cryptocurrency exchange finished at $245.84, representing a 40% increase year-to-date.  

"We anticipate a substantial potential for short-term gains from the inflow of USD Coin (USDC) outstanding balances, the rise in crypto asset prices, and the apparent return of retail interest from its 2023 low point," stated analysts headed by Kyle Voigt.

Consistent with previous reports, USDC outstanding balances increased by 32% during the first quarter. Circle issues USDC, a stablecoin, with support from Coinbase. According to KBW, the cryptocurrency exchange makes money from gross interest on around 56% of the USDC holdings that are present.  

The stock has been benefiting from rising trading volumes, which boosted the report's average daily volume (ADV) from $2.4 billion in February to $5.1 billion in March.  

While many institutional investors would love to purchase Coinbase stock, the authors note that the company's ongoing legal struggle with the SEC and the unpredictable regulatory landscape make this an extremely challenging proposition.  

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