Summary
JPMorgan analysts downgraded Coinbase to underweight, expressing concern that the catalyst behind bitcoin’s recent surge won’t last. They noted outflows from Grayscale’s bitcoin ETF and compared the performance to the launch of the Gold ETF in 2004, finding the net flows disappointing. The analysts also highlighted the ongoing court battle between Coinbase and the SEC as a potential risk. However, they acknowledged that Coinbase could benefit from greater revenue opportunities and higher trading commission potential, as well as the rise of ethereum staking.
Key Points
1. JPMorgan analysts downgraded Coinbase to underweight, expressing concerns that the catalyst that pushed bitcoin to new highs may not last.
2. Outflows of $2.2 billion were reported from Grayscale’s bitcoin ETF, leading to a downgrade in the overall aggregate net sales below the Gold ETF GLD.
3. The court battle between Coinbase and the SEC poses potential risks, but analysts believe these risks may not impact operations in the near-term. However, if Coinbase is not granted a motion to dismiss, it could face a longer legal path against the SEC.