After experiencing a five-fold increase, Wall Street giant Goldman Sachs (GS) has finally announced the end of its bearish stance on the Coinbase exchange (COIN) after nearly two years, upgrading its rating from sell to neutral.
Goldman Sachs raised its rating on COIN to neutral in a report on the 7th of this month, increasing its target price from $170 to $282. COIN closed at $256 on the 8th.
Analysts attribute COIN’s surge to the significant rise in cryptocurrencies and Coinbase’s ability to achieve consistent profitability in both bull and bear markets. In addition to generating more revenue from the increase in cryptocurrency prices, Coinbase has maintained its market share and focused on controlling expenses and profitability in all market environments. Furthermore, Coinbase benefits from interest-sharing with USDC reserves, which has contributed to the significant increase in its stock price.
However, analysts led by Will Nance remain skeptical about COIN’s long-term performance. They note that while the actual use of cryptocurrencies is still limited, the price volatility has surpassed the potential excess returns, and retail adoption rates have not increased over time.
Since Goldman Sachs downgraded COIN to sell in June 2022, the cryptocurrency has surged more than five-fold. However, Goldman Sachs did anticipate COIN’s historical low, which occurred on January 6 last year when it dropped to $31.55. As of now, COIN’s all-time high is still $429, which it reached on its first day of listing in April 2021.
Coinbase, Goldman Sachs, and COIN/USD daily chart.
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