Coinbase shares hit an all-time high. To fix profits or to buy?

Bonds of crypto exchange Coinbase Global after a month-long rally caused by the recognition of the crypto industry by the U.S. authorities, ended trading on June 26 at a record high. The stock hit a new high for the first time in more than three years. And over the past 2.5 years, they have risen more than 1,000%, wrote Bloomberg. Analysts' estimates differ: some expect the crypto exchange's shares to fall, while others are raising their target price.

Coinbase shares rose 5.5 percent to $375.07 on Thursday. That marked the highest closing level ever for the stock on the exchange, noted Bloomberg. The previous record was set in November 2021 ($357.39) - just months after the direct listing of the company on Nasdaq. The stock was down about 0.4% in morning trading on June 27.

Coinbase shares have gained more than 45% since the U.S. Senate approved a bill on stablecoins - tokens pegged to common (fiat) currencies, such as the dollar. The exchange has a revenue-sharing agreement with Circle, a recently launched USDC steiblcoin issuer. Circle's shares have also soared since the IPO: they are now worth nearly seven times the offering price;

In late 2022, Coinbase securities were falling below $32 due to the crypto exchange FTX crash: at the time, investors feared that all digital assets would be outlawed, and cryptocurrencies were under pressure from the U.S. Securities and Exchange Commission (SEC). However, with the arrival of Donald Trump, who is a supporter of cryptocurrencies, in the White House, the process of recognizing digital assets in Washington and on Wall Street has begun, wrote Bloomberg. Coinbase shares have surged more than 1,000% since the 2022 lows.

Benchmark analyst Mark Palmer maintained his recommendation to buy the securities this week: he expects them to rise in price by another 12% to $421, Bloomberg reports. According to the analyst, revenue from working with stablecoins is likely to allow Coinbase to reduce its dependence on trading commissions, which are under pressure due to growing competition.

«The new high on the stock is confirmation that Coinbase's management has chosen the right strategy to diversify the platform and is focused on long-term growth,» Bloomberg quoted Palmer as saying. - It's also a signal that the market recognizes: cryptocurrency is serious and long term.»

Bernstein analyst Gautam Chhugani also this week, even before the record, raised his target price on Coinbase shares from $310 to $510. That became the highest forecast on Wall Street, shows MarketWatch. It's also higher than Coinbase's intraday high of $429.54, recorded on the day it debuted on the exchange in 2021, Bloomberg notes. The analyst also reiterated an Outperform rating («above market,» equivalent to a buy advice) for the stock.

«The U.S. government is set to introduce a new regulatory regime for digital assets, including the Stablecoin Act and a framework for crypto markets,» Chhugani wrote. - As regulatory pressure has eased, Coinbase has established itself as a leading financial platform in the crypto industry.»

Bernstein expects Coinbase's revenue to be $9.5 billion in 2025, rising to $12.7 billion in 2026 and reaching $14.1 billion in 2027. This growth is fueled by both increased trading activity - especially in the perpetual futures segment - and expansion in non-trading areas, including cryptocurrency and stablecoin stacking.

But the securities of cryptocurrency-related companies are known for their volatility and could suffer if token prices fall, Bloomberg warned. Wall Street forecasts suggest Coinbase shares are overvalued, the agency noted. The minimum target for the company's securities is $170, nearly half the current price, according to MarketWatch. The consensus target price is $289.9, also down nearly 23% from Thursday's closing price.

Analysts' opinions on cryptocurrency exchange shares differ. A total of 37 analysts have assigned ratings to them: 17 of them recommend buying, 18 advise to keep in the portfolio, and two - to sell.

The skepticism of some analysts is related, among other things, to the vulnerabilities in Coinbase's cyber defense revealed in May. The company reported to the SEC that an unknown hacker demanded $20 million from the exchange for not disclosing sensitive information about customers' personal data. The crypto exchange suggests that the hacker bribed foreign Coinbase employees to gain unauthorized access.

This article was AI-translated and verified by a human editor