Not long ago, Wall Street viewed crypto with a mix of suspicion and disdain. The space that Bitcoin spawned was largely derided by the mainstream financial world. It’s just a whim, right? A bubble on the verge of tears for everyone involved and a haven for criminal activity.
That view is certainly no longer the case. With the trend not dying off and the ecosystem thriving, Wall Street has slowly come to believe that crypto is here to stay.
The magnitude of the transformation from financial bad boy to the possible future of global payments was really justified recently with Coinbase’s public listing (COIN). The cryptocurrency exchange made a splash last week, with a NASDAQ listing of $ 75.9 billion. So, is all the fuss deserved?
Sean Horgan of Rosenblatt Securities thinks so.
“We are optimistic about the long-term positive effects of COIN as it benefits from growing cryptocurrency adoption and acceptance, while our short-term view is more cautious as the stock is at downside risk due to a decline in crypto price, the analyst said. “We believe long-term sustainable growth is less uncertain, and our expectations are potentially conservative given the upside risk of institutional adoption and subscription revenue growth.”
And Coinbase is certainly growing. In 2020, the company generated sales of approximately $ 1.3 billion, a 144% year-on-year increase. However, in 1Q21 alone, the company’s revenue reached $ 1.8 billion.
Although, as Horgan points out above, Coinbase is to some extent at the mercy of the crypto cycle, which is currently going through one of its boom phases. However, the downturn is notorious and the bear markets are long.
That said, crypto has reached a “tipping point in its path to legitimacy,” and Horgan believes it is a “long-term disruptive trend that is only in its early stages.”
There is evidence to support the claim. The institutions have been withdrawn and are now scooping up Bitcoin to store as a digital equivalent of gold. And as the recent launch of crypto trading on Venmo – PayPal’s mobile payment service – can demonstrate, the network effect will create more demand and companies will “likely see the value of offering a crypto checkout option at the time of checkout. . “
“As this ecosystem evolves and becomes more valuable, COIN is a way to capture the benefits,” the analyst summarized. “Net / Net, we are buyers of COIN as a long-term leader in the category and pure-play cryptocurrency stocks.”
Accordingly, Horgan started coverage of COIN with a Buy rating and a price target of $ 450. The implication for investors? Up from 44%. (To check out Horgan’s track record, click here)
Horgan’s colleagues agree. Based on purchases alone – 5, in total – the stock has a strong buy consensus rating. The average price target is also bullish, suggesting a ~ 50% rise in the next 12 months at $ 479.83. (See COIN Stock Analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the Recommended Analyst. The content is provided for informational purposes only. It is very important to conduct your own analysis before making an investment.