JPMorgan Downgrades Coinbase Stock to ‘Underweight’ Amidst Falling Crypto Prices
Major investment bank JPMorgan has downgraded cryptocurrency exchange Coinbase stock from a “neutral” to an “underweight” rating. The bank predicted poor performance amidst falling crypto prices and the lackluster adoption of new spot Bitcoin exchange-traded funds (ETFs).
In a note to investors on January 22nd, JPMorgan analysts argued that the recent SEC approval and launch of several spot bitcoin ETFs, expected to be a major boost for the crypto industry, have so far disappointed lofty expectations.
With Bitcoin having already fallen below $40,000 at press time, the analysts forecast further price declines across crypto assets, lower trading volumes, and shrinking revenue opportunities for crypto trading platforms like Coinbase.
Key points:
- JPMorgan downgrades the COIN stock rating from neutral to underweight (sell).
- Prediction based on:
- Bitcoin price slumps below $40k; expect further declines.
- “Underwhelming” flows into new spot BTC ETFs
- The previous $80 price target for COIN by December 2024.
- Coinbase stock is already down 27% over the past 30 days.
Read more: OKX To Compensate Users After Flash Crash In OKB Token
JPMorgan states Bitcoin ETF flows are underwhelming to date
Per the note, JPMorgan stated:
“We find spot Bitcoin ETF flows to date as underwhelming versus the lofty expectations many in the crypto industry had established in the run up to the approval.”
The long-awaited spot ETFs were approved on January 10th, sparking initial enthusiasm and a Bitcoin price surge above $48,000.
However, JPMorgan believes the hype has not translated into significant capital rotations into the new investment vehicles so far. With prices now declining, the bank sees scope for further disappointment and crypto market weakness ahead.
Read more: Mt. Gox Inches Closer To Bitcoin Repayments: Report
The note from JPMorgan comes at a time when the global crypto market cap has plunged by 4.93% in the last 24 hours. Bitcoin is currently trading at $39,370, with a 3% drop in value over the last 24 hours.
