Coinbase (NASDAQ:COIN) has had plenty of big announcements this month, some of which haven’t been received well by its user base, such as a partnership to provide surveillance technology to government agencies. Yesterday though, it was revealed that the company will be allowing users to deposit paychecks directly into their Coinbase accounts and will then convert all funds directly to cryptocurrency. This announcement hasn’t done much for COIN stock, which has been declining lately, but a new analyst report suggests that we may be about to see that trend reversed.
What Happened With COIN Stock
Cryptocurrency is experiencing a period of volatility right now, due largely to China’s recent stance against it and the bans it has implemented. Other crypto stocks such as Riot Blockchain (NASDAQ:RIOT), Marathon Digital (NASDAQ:MARA) and Bit Digital (NASDAQ:BTBT) have spent the day declining.
This trend is likely the primary cause of COIN stock’s poor performance of late. It’s been in the red and closed down 1.03%. The days leading up to it haven’t been much better, with Coinbase declining by more than 4% for the week. In addition, COIN stock is down by more than 12% for the month.
Not a promising industry landscape for investors, right? Well, not so fast. On the contrary, one analyst from JMP Securities sees Coinbase as having significant potential, so much so that they’ve given it a rating that has COIN stock outperforming the market and assigned it a price target of $300.
What It Means
In a recent report, JMP Analyst Devin Ryan stated “With the company just scratching the surface of its long-term potential, in what we view as a rapidly growing and evolving addressable market, we see a compelling value proposition in COIN shares.”
Ryan adds that while the team at JMP does not expert COIN stock to move in a straight line, the material upside that they see easily compensates for any inherent risk.
For analysts to set a price target that high above the current share price of $229.94 indicates that not only do they see long-term potential in the stock, but that they consider this to be a key buying period. The phrase “Buy the Dip” is almost a rally call in the world of crypto trading, but it isn’t typically applied to companies as large as Coinbase.
As the problems in China continue to create turbulence in U.S. crypto markets, there’s no telling exactly how long this dip will continue, but it’s possible that COIN stock will dip even further.
Why It Matters
Since its trading debut in April 2021, Coinbase hasn’t exactly had an impressive year of trading.
The type of bullish perspective that Ryan is taking on it, though, indicates that his faith in the company’s long-term potential is strong and that he doesn’t see the current losing season as a reason to turn against it.
It’s worth noting that through it all, Coinbase still has the “competitive advantage” of being the first in its field and as such, the most established name among crypto trading exchanges. Its also the first of its kind of begin trading publicly so we don’t have any trading patterns from competitors to compare it to as indicators for the future.
There’s plenty of reason to believe that Ryan is correct, though, in his assessment of crypto as a platform with the potential to reach many more investors as crypto markets continue to expand and develop. Even if COIN stock fails to hit his price target, if it even comes close it will mean a significant profit for the investors who followed his advice.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
