Coinbase Set for Long-Term Growth as Spot Bitcoin ETF Approval Boosts Trading Volume and Liquidity

Oppenheimer Predicts Coinbase Will Thrive as Blockchain Technology Gains Long-Term Adoption

The approval of spot bitcoin (BTC) exchange-traded funds (ETFs) in January is expected to boost Coinbase’s trading volume in the long run, according to a research report from broker Oppenheimer. Analysts at the firm raised their earnings estimates for the crypto exchange and predict that COIN’s 1Q24 trading volume could increase significantly.

The report also highlights the increasing liquidity in the digital asset space, with the average market cap of USD Coin (USDC) rising. USDC is a stablecoin issued by Circle, which is backed by Coinbase. The company earns interest income on USDC outstanding balances, contributing to its improving outlook.

Oppenheimer has raised its price target for Coinbase stock from $200 to $276 as a result of these factors. At the time of publication, the stock was trading 2.5% higher at $258. While Coinbase has seen strong momentum since January, outperforming the S&P 500 index, there are potential headwinds investors should be aware of.

Despite the positive long-term outlook for blockchain technology adoption, there are risks involved. The approval of a spot ether (ETH) ETF is unlikely to happen as previously expected, which could lead to near-term volatility in cryptocurrencies. However, investors should remain positive about the long-term potential for Coinbase and blockchain technology.

Overall, Oppenheimer believes that Coinbase stands to benefit significantly from the continued adoption of digital assets following January’s ETF approval. The firm expects this growth to lead to increased liquidity and revenue opportunities for Coinbase over time.

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