Coinbase Is A Leading Driver, Beneficiary Of Cryptocurrency Economy: JPMorgan

Coinbase Global, Inc. COIN shares, though having shed much of their market value since the direct listing, are an attractive investment option, according to a JPMorgan Securities analyst. 

The Coinbase Analyst: Analyst Kenneth Worthington initiated coverage of Coinbase shares with an Overweight rating and $371 price target.

The Coinbase Takeaways: Coinbase is likely to occupy a key position in the U.S. market in the U.S. for transacting cryptocurrencies, Worthington said in a Tuesday initiation note.

"We see Coinbase as both a leading driver and beneficiary of the cryptocurrency economy," the analyst said. 

Although the crypto-economy is early in its lifecycle, the technology is gaining trust as a store of value, he said.

Coinbase has growth opportunities in further building its user base by converting the "interested" to "active," Worthington said.

The exchange can leverage its brand as a trusted, secure and easy-to-use exchange for cryptocurrencies to attract more retail and institutional clients to its platform, the analyst said, adding that this will drive trading volume, revenue and earnings growth.

Related Link: Coinbase Analysts: Crypto Exchange Well Positioned to Continue Strong Growth Trajectory

Coinbase, Worthington said, will expand its product offering to grow more crypto-market services, such as staking. The analyst sees staking as being supported by more tokens using the proof-of-stake protocol and by the Ethereum merge.

The exchange could also expand into areas better monetized by traditional brokers, such as cash management derivatives, lending and advisory services, but proceed in a "crypto-style," Worthington said.

Coinbase will also take advantage of a rapidly evolving crypto-economy together with a strong public currency to pursue mergers, with Asia particularly presenting an growth opportunity, according to JPMorgan.

COIN Price Action: At last check, Coinbase shares were advancing 6.82% to $240.67. 

Related Link: Why Coinbase Has This Analyst Bullish On The Long-Term Upside