Coinbase (COIN) is poised for growth in the long-term adoption of blockchain technology, according to broker Oppenheimer. The research report released by the broker on Wednesday raised its earnings estimates for the crypto exchange. The report speculates 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 that digital assets have continued to grow following the approval of spot bitcoin (BTC) exchange-traded funds (ETFs) in January. They also pointed out the increasing liquidity in the space, particularly noting the growth of the average market cap of USD Coin (USDC) to $31 billion by the end of the first quarter of 2024. USDC is a stablecoin issued by Circle, which is backed by Coinbase, and the exchange earns gross interest income on USDC outstanding balances.
As a result of this positive outlook, Oppenheimer raised its price target for COIN stock from $200 to $276. Currently trading at $258, shares are up 2.5%. However, analysts warned investors about 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. While ETH has shown strong momentum, risks remain with regards to its approval as an ETF. Previously expected in May, Oppenheimer now sees a low probability of this approval happening. Despite these challenges, investors should keep an eye on Coinbase as it continues to position itself for success in the world of blockchain technology.