Concerns have been expressed by JPMorgan Chase & Co. regarding the possibility of the collapse of Coinbase Global Inc., the largest cryptocurrency exchange in the United States. The company has cited a possible decline in the value of Bitcoin and a decrease in interest in exchange-traded funds (ETFs) that are tied to digital currency. Coinbase was downgraded from neutral to underweight by the analysts, who Kenneth Worthington led. They attributed the lower rating to a perceived disappointment in the impetus supplied by Bitcoin exchange-traded funds (ETFs).
In response to the downgrade, the shares of Coinbase witnessed a decline of 3.1%, which was the first time that JPMorgan had assigned a sell-equivalent rating to the stock since the company began providing coverage in May of 2021. Coinbase shares have fallen 29% in the first few months of the current year despite ending 2023 with a spectacular 400% gain, paralleling the spike Bitcoin experienced at the year’s close. This loss coincides with Bitcoin’s drop of 6.8%, which has resulted in the cryptocurrency trading below $40,000.
As a result of the recent acceptance of spot Bitcoin exchange-traded funds (ETFs) by the United States financial authority, market experts are now wondering whether or not the spectacular advances in crypto-related equities can be maintained. One of the analysts at JPMorgan, Worthington, voiced concern about the possibility of a deflation in the enthusiasm for cryptocurrency exchange-traded funds (ETFs), which might result in lower token values, decreased trading volume, and diminished chances for ancillary revenue for businesses such as Coinbase. Worthington maintained a price target of $80 for the stock, and the company forecasted that the value of the stock would decrease by 38% over the next year, beginning with Monday’s closing price.
According to the data that Bloomberg provided, Coinbase is experiencing an increasing amount of adverse sentiment, with twelve sell ratings, eight buy ratings, and eight hold ratings. The Commodity Futures Trading Authority (CFRA) lowered its advice to sell cryptocurrencies last week, citing concerns about increased competition in the cryptocurrency industry.
