JPMorgan, America’s largest bank, suggests that the Ethereum network and its native token, ether (ETH), could significantly contribute to the broader cryptocurrency ecosystem and serve as a positive driver of Coinbase (COIN) earnings.
While maintaining a neutral rating, JPMorgan has raised its price target for Coinbase from $95 to $150 to account for the rally in the crypto market and the positive influence of ether on the exchange’s revenue.
Despite the optimistic outlook, Coinbase shares experienced a decline of over 4% in premarket trading, dropping to $223.
The focus in the crypto market has predominantly been on the inflow of new capital into spot bitcoin (BTC) exchange-traded funds (ETFs) and its favorable effect on bitcoin’s price. However, JPMorgan emphasizes that the appreciation of ether also holds significant importance.
According to analysts led by Kenneth Worthington, the use cases of Ethereum extend beyond the crypto ecosystem, presenting a robust earnings driver for Coinbase in the near term. The recent upgrade on the Ethereum network, known as the Dencun upgrade, which occurred on March 13, is highlighted as a factor driving crypto development and contributing to the positive outlook.
Looking ahead, JPMorgan emphasizes that Coinbase’s long-term success will be fueled by development initiatives, particularly in areas such as tokenization and payments.