On Friday, JPMorgan maintained a Neutral rating on Coinbase (NASDAQ:COIN) Global Inc. (NASDAQ: COIN) but raised its price target to $150 from the previous $95. This adjustment reflects the firm's recognition of Ethereum's significant role in the cryptocurrency ecosystem and its contribution to Coinbase's earnings.
The analyst from JPMorgan highlighted Ethereum's impressive year-to-date performance, noting that Ether has surged approximately 70%, crossing the $4,000 mark, and has outperformed Bitcoin in terms of returns.
The report acknowledges the general market focus on the influx of new money into U.S. spot Bitcoin ETFs and the subsequent positive effect on Bitcoin prices. However, it emphasizes the meaningful impact of Ethereum's appreciation on Coinbase's business. The use cases for Ethereum extend beyond the crypto ecosystem, potentially creating a robust earnings driver for Coinbase in the near term.
The Dancun upgrade to the Ethereum network, which took place on March 13, is seen as a catalyst for further development in the crypto space. The upgrade is part of Ethereum's ongoing enhancements and is considered a positive influence on the long-term prospects of cryptocurrency development.
JPMorgan's revised price target to $150 through December 2024 takes into account the substantial rally in cryptocurrencies and the positive effect that Ethereum's performance has had on Coinbase's revenue.
Despite the price target being below the current stock price of Coinbase, the firm recognizes a rapidly improving cryptocurrency environment and a rise in Coinbase's earnings potential. The report suggests that while the stock may have advanced beyond its fundamentals, the overall conditions in the crypto market are favorable.
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