Coinbase started with Buy with a price target of $ 285


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Coinbase Global Inc (NASDAQ: COIN) stocks were down about 1% after a team of analysts initiated coverage of the stock with a buy rating and a price target of $ 285. Canaccord Genuity describes the cryptocurrency exchange as “a clear entry into the crypto economy”.

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Coinbase as an entry into the crypto economy

Analysts, led by Canaccord Genuity’s Joseph Vafi, said in a note today that Coinbase could be a big beneficiary as the future of finance and storage of value become increasingly blockchain-bound. They described Coinbase as “a kind of ‘super ramp’ to all crypto” for consumers, institutions and companies.

Vafi and his team found that the majority of Coinbase’s revenue comes from trading, but in the future, revenue could come from supporting new protocols, leveraging decentralized finance, and even owning cloud-centric blockchain solutions. However, for now, the company is only generating trade revenue.

The Canaccord Genuity team said that market share and technology leaders who use their position to drive innovation by creating new customer behaviors offer some of the “most compelling, long-term value propositions on the market”. Despite seeing ongoing volatility, they are comparing the future of blockchain and digital assets to what the market has seen in e-commerce.

Vafi and his team believe that just like Amazon is a leader in e-commerce, Coinbase could be a leader in digital assets. They also believe that the cryptocurrency exchange’s leadership position has been strengthened by its initial public offering.

Concerns about Coinbase

While looking to Coinbase for a bright future, the Canaccord team is aware that its business model is currently experiencing significant volatility as it is highly correlated with spot crypto prices. They believe Coinbase could see a much weaker financial performance if we were on a bitcoin hold for a while.

However, Vafi and his team are optimistic about Bitcoin in the medium term and believe that the blockchain will provide an excellent foundation for all digital assets in the future. They like Bitcoin’s increasingly vertical supply curve and the entry of institutional investors into the asset class.

Vafi and his team also like comparisons between Bitcoin and gold or other stores of value and the increasing depth and breadth of crypto trading markets. They also believe that an exchange-traded Bitcoin fund is inevitable in the US.

“Exciting case”

The Canaccord Genuity team sees Bitcoin’s recent weakness as “more intriguing” for Coinbase’s short-term investment. They pointed to “comparable ratings in both crypto-related games and leading financial exchanges.” Vafi and his team also believe that Coinbase is “excellent” compared to its competitors because of its growth and margins.

In the short term, however, they warn that Coinbase stock may not be able to go much above the spot prices for Bitcoin and Ethereum compared to longer-term opportunities. Spot prices were very volatile during the second quarter, so Vafi and his team expect some headwinds in Coinbase’s earnings report for the second quarter. However, they also believe that the possible outcome is already well understood.

The Canaccord team also believes Coinbase “will step on the gas pedal on sales and marketing spending”. They expect this trend to be of benefit in the longer term as the company’s user base grows, although they note that it will be a headwind against an already “mature profitability model”.

Vafi and his team pointed out that competition in the cryptocurrency space continues to increase, but they believe the sheer number of new users allows Coinbase to maintain its pricing structure.


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