Coinbase Global has seen a recent surge in stock prices, with one analyst predicting a threefold increase in value as the price of Bitcoin and other digital assets continue to rise.
Bo Pei, an analyst at U.S. Tiger Securities, upgraded Coinbase (ticker: COIN) to Buy from Hold, raising his price target on the stock to $200 from $65. The move makes him by far the most bullish of more than 20 analysts surveyed by FactSet.
Shares in Coinbase have seen a recent surge in value, with the stock closing at $75.14 on Tuesday. The last time the stock was above $200 was a year ago.
This bullish trend is in part due to the increasing value of cryptocurrencies, which is good news for Coinbase. “Crypto has started a new bull run, and so has Coinbase,” said Pei in a Monday note. “We believe crypto price is the main factor to consider when investing in Coinbase. We believe a crypto bull market will drive significant revenue growth.”
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Indeed, the value of cryptocurrencies is having a positive impact on Coinbase. The stock is seeing gains not only because of the increasing value of digital currencies, but also because of Coinbase’s own success.
Cryptocurrencies are on an impressive winning streak, with Bitcoin rallying some 70% this year from the depths of a bear market. The price has hit its highest point since June, when the crypto crash accelerated with a string of bankruptcies.
“Our thesis assumes that a new crypto bull market has begun and Coinbase’s revenue and profit could recover to its 2021 level, when Coinbase was trading at above $200,” said analysts at investment firm Fundstrat.
Nevertheless, Pei sees some risks for Coinbase, chief among which is regulation. U.S. lawmakers and regulators have taken a much harder look at crypto companies in the past year. Scrutiny has only accelerated after the collapse of FTX and the meltdowns of two banks that served the digital-asset industry.
The implosions of Silvergate Capital and Signature Bank were initially a setback for crypto prices, but Bitcoin has rallied in response to wider concerns about banks that have griped about the industry’s growth.