Wall Street Loses Faith In Coinbase
WallStreetBets, the hyper popular investment forum on Reddit, claims that any downgrade by either Jim Cramer (the CNBC presenter) or JP Morgan, the largest US business bank, is a contra-indicator. This means that the ‘degens’ (short for degenerates) believe you should do the exact opposite of what these two advise.
With that in mind, it is rather interesting to note that JPMorgan is lowering their price target for shares of Coinbase from $78 to $60 for December.
IPO at all-time-high
You may remember that back in April of 2021, the Coinbase IPO was the quintessential top for Bitcoin, and as it happens, for the Coinbase stock as well. On the day of it’s listing on the Nasdaq, Coinbase’s stock rose to an all-time-high of $381. By September 2022, the stock is down 84% since that moment.
JPMorgan’s North American equity team is lowering its price target for shares of Coinbase Global from $78 to $60 for December.— CryptoBuzz (@Crypto__Buzz) September 25, 2022
Many Wall Street firms feel that the crypto price is correlated with the Coinbase stock, as the biggest US crypto platform gets the majority of its revenue from crypto trading levels.
For that reason, JP Morgan believes it’s necessary to downgrade Coinbase at this point, writing to investors that they:
Think pressure on Coinbase revenue from falling cryptocurrency markets will pressure the stock price.
CEO Brian Armstrong meanwhile still believes last year’s IPO was the right move. Speaking at Messari’s Mainnet conference in New York this past week, he explained that going public:
Has put us on the main stage, where we’re able to get deals done with BlackRock and companies like Meta.
Now we’re the first Fortune 500 company doing crypto, and so we can go do deal with other Fortune 500 companies now, and they treat us more as a more legitimate force out there.
Be that as it may, Coinbase shares seem to have trouble breaking the $100 price level in these past few months. Although they are still above their June lows, the stock has fallen 75% year to date.
Then again, if WallStreetBets is right, that downgrade should be seen as a contra-indicator and this might be a good time to enter.