Discover How Ether Could Boost Coinbase’s Profit Potential, According to JPMorgan
American banking giant, JPMorgan (JPM) recently released a report that suggests Ethereum and its token, ether (ETH) could be a major contributor to the cryptocurrency ecosystem and a driving factor of Coinbase’s (COIN) earnings. The report also raised the target price for Coinbase to $150 from $95. This is a significant increase from their earlier neutral rating and signifies the impact of ether’s rise on the exchange’s revenue.
The research report, written by Kenneth Worthington and other analysts, states that the market’s focus has primarily been on the net new money entering spot bitcoin (BTC) ETFs and how it is affecting the price of bitcoin. However, JPMorgan believes that the rise of ETH should not be overlooked as its impact on the crypto market is also substantial.
The report also mentioned the recent development on Ethereum’s road map, the Dencun upgrade, as being a driving force for crypto development. The upgrade, which took place on March 13, is seen as a positive event for the long-term success of Coinbase. Additionally, the Ethereum network’s various use cases extend beyond the crypto ecosystem and can act as a strong earnings driver in the short term.
Despite these positive developments, Coinbase shares have seen a slight decline in premarket trading, slipping over 4% to $223. However, JPMorgan still believes that the longer-term success of Coinbase will be driven by developments in tokenization and payments. These developments will not only have a positive impact on Coinbase but also on the entire cryptocurrency ecosystem.
