Coinbase (COIN) is expected to benefit from the long-term adoption of blockchain technology, according to a research report from broker Oppenheimer. The analysts at Oppenheimer raised their earnings estimates for the crypto exchange, predicting that COIN’s 1Q24 trading volume could significantly increase.
The report highlights the increasing liquidity in the digital asset space, with the average market cap of USD Coin (USDC) having risen. USDC is a stablecoin issued by Circle, which is backed by Coinbase. Coinbase earns interest income on USDC outstanding balances, which has contributed to the company’s improving outlook.
As a result of these factors, Oppenheimer raised its price target for Coinbase stock to $276 from $200. The stock was trading 2.5% higher at $258 at the time of publication. While the stock has seen strong momentum since January, outperforming the S&P 500 index, there are potential headwinds investors should be aware of.
Despite the positive long-term outlook for blockchain technology adoption, there are risks involved. The report notes that the approval of a spot ether (ETH) ETF is unlikely to happen as previously expected. Investors should be cautious of near-term volatility but remain positive about the long-term potential for Coinbase and blockchain technology.
