Coinbase exchange: profit growth and positive prospects thanks to the increase in cryptocurrency prices

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After exceeding profit forecasts in the fourth quarter, analysts at Coinbase have expressed increased optimism towards the crypto exchange, triggering a rise in the value of the shares. 

According to them, the increase in cryptocurrency prices is expected and will generate positive impacts on the exchange’s revenues. The exceeded profit expectations led KBW to improve the stock valuation, moving from “underperform” to “market perform”. 

In response to these developments, the value of the shares has risen by up to 15% during pre-market trading. Let’s see all the details below. 

The increase in crypto prices expected as a positive catalyst for Coinbase’s revenues 

As previously announced, recently Coinbase (COIN), the crypto exchange, announced its fourth quarter results after market close, surpassing consensus estimates and catalyzing a 15% increase in pre-market trading on Friday.

This has triggered a series of updates by Wall Street analysts, with KBW upgrading Coinbase’s rating from underperform to market perform. 

In particular, raising the price target from $93 to $160. 

KBW, while expressing skepticism about long-term speculative enthusiasm, has considered the positive impact of the increase in prices of cryptocurrencies and has noted a significant increase in the balance of USD Coin (USDC).

Wedbush has reiterated its outperform rating, raising the price target to $200 from $180 and highlighting that Coinbase’s results effectively address bearish arguments. 

Canaccord Genuity has maintained a buy rating, raising the price target to $240 from $140, citing favorable winds for the company and the sector. 

At the same time, JMP Securities confirmed the outperform rating, raising the price target to $220 from $200, expressing satisfaction with the performance in the fourth quarter and further confidence in future prospects.

However, Mizuho Securities has shown less enthusiasm, remaining cautious on Coinbase’s actions. 

While acknowledging that the company has exceeded revenue and EBITDA estimates, it has highlighted a disagreement in consensus and emphasized a key disappointment regarding the 80 basis point decline in retail acquisition rate on a quarterly basis. 

As a result, the investment bank has confirmed the underperform rating and maintained the price target at $60.

Coinbase adds Polkadot, Internet Computer, and NEAR Protocol to futures transactions

Coinbase International, the global platform of the cryptocurrency exchange Coinbase, has recently announced its intention to list the altcoins Polkadot (DOT), Internet Computer (ICP), and NEAR Protocol (NEAR) in futures transactions. 

The official statement from Coinbase has specified that these altcoins will be included in the DOT-PERP, ICP-PERP, and NEAR-PERP markets starting from February 22, 2024, at 13:00 Turkey time (UTC+3).

In the same context, Coinbase Global is preparing to report earnings after the market closes in the United States. 

Despite the benefits derived from the current bullish trend of cryptocurrency prices, the platform is still dealing with regulatory issues. 

According to FactSet, analysts predict an earnings per share of $0.02 for the fourth quarter and a revenue of $826 million according to generally accepted accounting principles.

However, Coinbase faces a significant regulatory obstacle. 

The Securities and Exchange Commission (SEC) has sued the exchange for alleged operation as an unregistered stock exchange, and the company is currently defending against this accusation. 

After the arguments presented both by the SEC and by the company last month, a judge will be called upon to decide whether a hearing will be necessary in the coming weeks.

Coinbase asks for a correction to WSJ: denies accusations of ‘crypto terrorism’ against Hamas

Following the recent statements from the US Treasury denying Hamas’ involvement in financing terrorism through cryptocurrencies, Coinbase’s Chief Legal Officer (CLO), Paul Grewal, has urged the Wall Street Journal (WSJ) to correct its reports. 

This request for rectification has arisen from the Treasury’s statements that contradict the previous accusations by the WSJ regarding the alleged involvement of Hamas in illicit financing through digital resources.

The Undersecretary of the Treasury for Terrorism and Financial Intelligence, Brian Nelson, provided clarifications before the House Committee on Financial Services regarding alleged links between cryptocurrency payments and terrorist groups. 

He explained that these connections had been misunderstood and emphasized the minimal amount of cryptocurrencies actually reached by these groups. 

Nelson has debunked the previous claims about Hamas using tens of millions of dollars in cryptocurrencies for terrorist activities, stating that the expected number is very low.

In response to these statements from the Treasury, Coinbase’s CLO, Paul Grewal, emphasized the importance of accurate reporting, especially on sensitive issues such as terrorism financing.

It also emphasized the Treasury’s position that cash remains the main vehicle for illicit finance, highlighting the limited use of cryptocurrencies by Hamas during attacks against Israel.

Paul Grewal highlighted the possible consequences of misinformation on cryptocurrency regulation, warning against decisions based on inaccurate data. 

Referring to the successful collaboration with Israeli law enforcement, he emphasized the importance of correcting the situation to avoid misleading interpretations of the legal framework for digital resources.