Coinbase PT raised at Barclays despite ‘somewhat cautious’ crypto view By Investing.com

By Sam Boughedda 

Barclays analysts raised the firm’s price target on Coinbase (NASDAQ:) to $57 from $45, maintaining an Equal Weight rating on Tuesday, telling investors they are “somewhat cautious” on crypto assets despite the recent price rises.

The analysts stated that the data indicates the pickup is not being driven by retail activity.

“Crypto markets have rallied into the new year, with asset prices and spot trading volumes increasing materially YTD vs. the lows following the collapse of FTX (e.g., BTC and ETH prices up ~31% and ~24% since 12/31, respectively, vs. the S&P up 6.5%),” the analysts wrote. “As such, Q1 volumes are on track to well surpass our prior estimates for Coinbase, and we are updating our model with this new data (our 1Q23 trading volume estimate comes up ~22%).”

However, they noted that much of the improvement is institutional, not retail; therefore, Barclays’ revenue estimates are less than its volume estimates (10%).

“It is not yet clear that this rally will be sustainable (particularly given recent regulatory developments, which appear to have impacted asset prices), and we do not yet see reason to raise our longer-term assumptions around engagement and trading volumes,” the analysts added.

“Our analysis of app download and usage data points to little incremental retail engagement, suggesting most of the rally so far is from the institutional side (and therefore less impactful to revenues), though downloads and DAUs have shown a modest uptick since the beginning of the year.”