Coinbase Stock (NASDAQ:COIN): Gear Up for Gyrations, Crypto Fans

Coinbase (NASDAQ:COIN) is trending, and there are good reasons for this. Fans of crypto and the blockchain need to pay attention because Coinbase is at the center of major news stories that could mint new millionaires. I am bullish on COIN stock for the long term, but short-term traders should expect share price gyrations in both directions.

Coinbase is headquartered in Delaware, and the company operates a popular cryptocurrency trading platform known as Coinbase. The Securities and Exchange Commission (SEC) just approved spot Bitcoin (BTC-USD) exchange-traded funds (ETFs). However, it’s also possible to own Coinbase stock instead of these upcoming ETFs because it closely follows the price of Bitcoin.

Because it’s fresh news, it seems like everybody is talking about the approval of spot Bitcoin ETFs. This just goes to show how much attention is being focused on cryptocurrency and blockchain stocks now. So, it’s a great time to take a closer look at Coinbase and decide if COIN stock deserves a place in your portfolio.

Why Have Insiders and Big Investors Been Selling COIN?

When big investors and corporate insiders sell shares of a stock, this may be a bad sign for the company. Consequently, it’s important to be aware of recent major selling activity with Coinbase stock. For example, just a week ago, ARK Invest, run by famous financier Cathie Wood, sold 166,000 Coinbase shares. I doubt that Wood is suddenly a Bitcoin bear, so maybe she has a particular problem with Coinbase.

It seems more likely, however, that Wood just wanted to rebalance her portfolio and take some chips off the table after the recent COIN stock rally. These things are difficult to know with certainty since SEC filings typically don’t disclose the reasons why fund managers sell shares of particular stocks.

What’s more concerning than Wood’s share sale is a couple of notable insider transactions. First, Coinbase COO Emilie Choi sold 8,000 shares of the company’s stock in a transaction totaling $1.39 million. Furthermore, Coinbase Director Marc Andreessen sold 34,000 shares of COIN stock in a transaction valued at a whopping $5.57 million.

Again, it’s hard to know exactly why these Coinbase insiders sold so many shares. Did they expect a “buy the rumor, sell the fact” stock-price drawdown in the days and weeks following the SEC finally approving spot Bitcoin ETFs?

It’s a possibility worth considering, as Dan Dolev of Mizuho Securities warned, “With the hype around Bitcoin ETFs likely to reach a climax in the coming weeks, COIN bulls could experience a rough awakening when they realize how minimal the revenue impact is.” Hence, it’s possible that the aforementioned Coinbase insiders are preparing for volatility and disappointment.

COIN Stock Gets Price-Target Hikes

Despite Dolev’s cautionary tone, not every expert on Wall Street is worried about Coinbase’s future prospects. Indeed, some analysts are actually lifting their price targets on Coinbase stock.

At the same time, some analysts aren’t prepared to publish optimistic ratings on Coinbase. An example would be TD Cowen analyst Stephen Glagola, who hiked his price target on Coinbase shares from $39 all the way up to $75. Yet, Glagola reiterated an Underperform rating on COIN stock, citing what the analyst believes to be an excessive market cap.

Moreover, Barclays (NYSE:BCS) analyst Benjamin Budish raised his price target on Coinbase stock from $67 to $110 but kept his Underweight rating on the shares. Reportedly, Budish is concerned that the market’s excitement is already priced into Coinbase shares.

A much more enthusiastic tone comes from Needham analyst John Todaro, who lifted his price target on Coinbase shares from $160 to $180 and reiterated his firm’s Buy rating on the shares. Todaro and his colleagues at Needham are evidently impressed with Coinbase’s product growth and even went so far as to name COIN stock as their Top Pick for 2024.

Is Coinbase Stock a Buy, According to Analysts?

On TipRanks, COIN comes in as a Hold based on seven Buys, six Holds, and seven Sell ratings assigned by analysts in the past three months. The average Coinbase stock price target is $118.50, implying 21.7% downside potential.

If you’re wondering which analyst you should follow if you want to buy and sell COIN stock, the most profitable analyst covering the stock (on a one-year timeframe) is Devin Ryan of JMP Securities, with an average return of 39.51% per rating and a 58% success rate. Click on the image below to learn more.

Conclusion: Should You Consider Coinbase Stock?

As you can see, analysts have widely varying outlooks for Coinbase stock, and investors are left to decide what to do with their investable capital. Nevertheless, I see the recent approval of spot Bitcoin ETFs as a bullish catalyst for crypto assets in general and, hence, for Coinbase as a cryptocurrency-related business.

For the long term, I expect more capital to flow into the crypto and blockchain space, which should benefit Coinbase. That’s why I’m still bullish on COIN stock, and despite the insider selling and lukewarm reception on Wall Street, I expect the stock to move higher in the coming months.

Disclosure

Source link

Leave a Comment