Coinbase’s stock could sink 35%, JPMorgan says, warning of bitcoin ETF ‘mirage’ – MarketWatch

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Coinbase Global Inc. shares surged last year, in part amid optimism about the spot bitcoin ETFs that were soon to come. But JPMorgan analyst Kenneth Worthington is now worried that sentiment will reverse.
“[W]e think the catalyst in Bitcoin ETFs that has pushed the ecosystem out of its winter will disappoint market participants,” he wrote as he downgraded Coinbase’s stock COIN, -3.14% to underweight from neutral late Monday.
Don’t miss: Jamie Dimon still sees no value in bitcoin after ETFs debut
Bitcoin prices BTCUSD, +1.84% had turned south of $40,000 by the time he wrote his note, and he and his team “see greater potential for cryptocurrency ETF enthusiasm to further deflate, driving with it lower token prices, lower trading volume and lower ancillary revenue opportunities for firms like Coinbase.”
Worthington maintained his $80 price target on Coinbase shares, with that target implying the potential for more than 35% downside during what could be “a more challenging year.” The stock was off nearly 4% in Tuesday’s premarket action.
In Worthington’s view, the prospect of great windfalls for crypto players stemming from recently launched bitcoin ETFs could be a “mirage” — or could at least require a longer-than-anticipated timeline.
“While it has only been ~1 week since launch, the initial net inflows into Bitcoin ETFs seems to be far less than the cryptocurrency community was touting in the financial media, and less than what we witnessed in the first week of flows into the Gold ETF when it launched in 2004,” he wrote. “We think much of the crypto-industry set a high bar for the ETF launches, and, while meaningful, we think expectations are simply too high and unrealistic.”
See also: Bitcoin ETFs just had their first week of trading. Here’s who’s winning and losing.
Following Worthington’s downgrade, 11 of the 27 analysts tracked by FactSet now have bearish ratings on Coinbase shares. Eight are bullish, and eight more have hold-equivalent ratings. The average price target is $126.67, close to Monday’s finish of $128.21.
Shares of movie-theater chain and original meme stock AMC have hit a series of record lows recently.

Emily Bary is a MarketWatch news editor based in New York.
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