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Coinbase Global Inc. stands to benefit from higher interest rates heading into next year, analysts wrote Wednesday.
coinbase coin,
The stock rose more than 5% on Wednesday, reaching an intraday high of $79.20 before closing 4.6% at $78.70.
JP Morgan analyst Kenneth Worthington said he sees interest income as a $1.2 billion earnings opportunity for Coinbase after the company made the announcement. on tuesday We were reducing our reliance on stablecoins like USDCUSD.
By doubling the staked Ether ETHUSD debt ceiling,
vault.
Based on 1-month Treasury yields reaching ~3.75% by 2022, we estimate that Coinbase has a substantial revenue opportunity due to rising interest rates. $64 to $78 To.
Coinbases earnings opportunities are much larger than those seen at other financial institutions, reflecting the idiosyncrasies of some unique investments (USDC) and crypto accounts, Worthington said. The opportunity comes from Coinbase’s investment in USDC, but we also expect Coinbase to generate significant income from the fiat currency of its customers.Unlike its peers in the financial industry, who pass interest income to their customers, expects to retain nearly all of its interest income.”
Read on Barron’s: Traders Are Betting On Ether At Unprecedented Levels Amid Crypto Market Turmoil
Worthington said he expects $700 million from a joint venture between Coinbase and Circle. center consortiumOversees USDC.
As a result, Worthington has raised Coinbase’s 2022 revenue forecast to $3.99 billion from $3.84 billion and $5.53 billion from 2023’s $5.03 billion. On average, analysts surveyed by FactSet forecast revenue of $3.39 billion in 2022 and $4.28 billion in 2023.
Coinbase shares have fallen 69% so far this year as cryptocurrency trading volumes have fallen.
17% less. A few weeks ago, Coinbase CEO Brian Armstrong said: Cryptocurrency ‘Winter’ Continues for Another 12-18 Monthsor perhaps even longer, then Laid off 18% of staff in June.
read: 5 things you should know about Ethereum Merge
Bitcoin BTCUSD,
Tuesday was up 2%, with Ethereum up 3%, giving both cryptocurrencies a year-to-date loss of around 55% against the S&P 500 index’s more than 17% drop and 14% surge. rice field. In the US dollar index DXY,
Of the 27 analysts covering Coinbase, 13 are buying, 11 are holding, and 3 are selling, with an average target price of $100.68.
