KBW Raises Coinbase Price Target to $230, Cites Long-Term Crypto Economy Growth

KBW Raises Price Target for Coinbase to $230

Investment banking firm KBW has recently increased its price target for Coinbase (COIN) from $160 to $230, citing the unique opportunity for investors to tap into the long-term growth potential of the crypto economy. The stock closed at $245.84 on Tuesday, reflecting a year-to-date increase of over 40%.

Analysts Optimistic About Coinbase’s Revenue Prospects

In a recent research analysis, KBW analysts led by Kyle Voigt expressed optimism about Coinbase’s revenue prospects in the near term. They highlighted the revenue opportunity from the growing outstanding balances of USD Coin (USDC), a stablecoin backed by Coinbase.

• USDC outstanding balances surged by 32% in the first quarter.
• Coinbase earns gross interest income on approximately 56% of these outstanding balances.

Surging Trading Volumes and Stock Performance

The report also emphasized the positive impact of surging trading volumes on Coinbase’s stock performance. In March, the average daily volume (ADV) reached $5.1 billion, compared to $2.4 billion in February.

Challenges Faced by Coinbase

Despite the positive outlook, Coinbase faces challenges including its legal battle with the U.S. Securities and Exchange Commission (SEC) and the uncertain regulatory environment. These factors pose difficulties for institutional investors considering owning Coinbase stock.

SEC’s Lawsuit Against Coinbase

Last week, Judge Katherine Polk Failla ruled that the SEC’s lawsuit against Coinbase can proceed. The lawsuit alleges that Coinbase operates as an unregistered securities exchange, broker, and clearing agency. While the judge dismissed some claims, the case continues to progress.