Oppenheimer Predicts Coinbase Will Gain from Increasing Adoption of Blockchain Technology

The cryptocurrency exchange Coinbase (COIN) is expected to benefit from the long-term adoption of blockchain technology, according to broker Oppenheimer. This was revealed in a research report released by the broker on Wednesday, which raised its earnings estimates for Coinbase.

The report predicts that Coinbase’s trading volume in the first quarter of 2024 could see a significant increase of 95% quarter-on-quarter and 107% year-on-year, reaching $300 billion. Analysts Owen Lau and Guru Sidaarth highlighted the growing adoption of digital assets, particularly following the approval of spot bitcoin (BTC) exchange-traded funds (ETFs) in January. They also noted the increasing liquidity in the space, with the average market cap of USD Coin (USDC) reaching $31 billion by the end of the first quarter of 2024. USDC is a stablecoin issued by Circle, which is backed by Coinbase and earns gross interest income on USDC outstanding balances.

In light of this positive outlook for Coinbase, Oppenheimer raised its price target for the stock to $276 from $200. As of publication, Coinbase shares were trading 2.5% higher at $258. However, analysts warned of potential near-term volatility even as they remain optimistic about the long-term adoption of blockchain technology.

Looking ahead, there are some potential headwinds that investors should be aware of, according to the report. While previously expected in May, Oppenheimer now sees a low probability of approval for a spot ether (ETH) ETF due to regulatory concerns and lack of liquidity in ETH markets.

By Aiden Johnson

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