On Thursday, Goldman Sachs adjusted its stance on Coinbase (NASDAQ:COIN) Global Inc. (NASDAQ:COIN), raising the stock from a Sell to a Neutral rating. The investment firm also set a new stock price target of $282 for the cryptocurrency exchange platform. This upgrade reflects recent developments in the cryptocurrency market, including a significant surge in crypto prices, which have reached all-time highs.
The change in rating comes as daily trading volumes on Coinbase have hit peaks not seen since 2021, prompting Goldman Sachs to increase its revenue estimates for the company by 48% since early February. These heightened volumes have played a crucial role in the firm's reassessment of Coinbase's stock.
The previous Sell rating was based on the belief that the limited everyday, non-trading use cases for cryptocurrencies would lead to underperformance over time. This view was rooted in the difficulty of projecting a sustainable long-term growth rate for Coinbase without clear signs of broader adoption of cryptocurrencies.
Goldman Sachs's revised outlook on Coinbase is tied to the improved performance and adoption metrics in the crypto market. The analyst commented on the upgrade, noting the significant increase in revenue estimates due to the recent surge in crypto prices and trading volumes.
The new stock price target of $282 represents a notable shift from the firm's earlier valuation of Coinbase. The update is a direct response to the current trends in the cryptocurrency market and the platform's trading activity, which suggest a more favorable short-term outlook for Coinbase.
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