©Reuters.
The action Coinbase Global (NASDAQ:) fell 4.6% in the early hours of Tuesday, following a drop in the value of bitcoin, the best-known cryptocurrency, which fell more than 4%.
Bitcoin hit a seven-week low and fell below $40,000, despite excitement over the approval of several exchange-traded funds (ETFs).
Over the past year, the value of bitcoin has seen a significant increase in anticipation of the Securities and Exchange Commission’s (SEC) approval of ETFs that would be directly correlated to the value of bitcoin – an unprecedented event in American financial markets.
Yet after the approval of these ETFs, the cryptocurrency has not performed as well as expected, defying predictions of a significant increase in value due to the infusion of institutional investment.
Additionally, JPMorgan analysts downgraded their rating of the stock from neutral to underweight as they fear that the positive impact of the approval of Bitcoin ETFs in 2023 may not continue in 2024.
“While we recognize Coinbase as the leading cryptocurrency exchange in the United States and a key player in the global cryptocurrency trading and investment market, we believe the enthusiasm surrounding Bitcoin ETFs, which has contributed to revive the market, will not meet investors’ expectations,” the analysts said in their report.
With the recent downward trend in the value of bitcoin, analysts predict a decrease in enthusiasm for cryptocurrency ETFs, which could lead to a reduction in the value of cryptocurrencies, a decrease in trading volumes. exchange and fewer secondary income opportunities for companies like Coinbase.
Therefore, analysts predict that 2024 could present more challenges for Coinbase stock, even as the company continues to make progress in important areas, such as expanding derivatives trading and developing of its Layer-2 Base platform.
JPMorgan analysts also reduced their price target for Coinbase stock to $80 per share, indicating a potential decrease in value of around 35% from the stock’s current price.
This article was created and translated with the help of AI and has been reviewed by an editor. For further details, please see our terms and conditions.