By Michael Scott
The US largest crypto exchange, Coinbase, has seen its local market share swell to 60%. The swell saw Coinbase trading volume rise significantly, given its critical input in market surveillance for the Bitcoin exchange-traded funds (ETFs).
The progress manifests in a recent rating by the Wall Street giant Goldman Sachs that upgraded Coinbase rating to neutral. The rating is an upgrade from the Sell, a move that saw the Coinbase stock price set at $282.
Goldman Reclassify Coinbase to Neutral Rating
Goldman revealed the rating upgrade in its Thursday, March 7 announcement. The neutral rating underscores the Goldman Sachs perspective change on Coinbase (COIN) stock. The upgrade is likely fuelled by the recent bullish momentum realized by the crypto market.
Blockchain-based analytic firm Kaiko illustrated that Coinbase has realized critical momentum in its trading volume. Kaiko noted that the crypto exchange trading volume accounted for less than half of US activity.
Kaiko observed that Coinbase has recently witnessed market share growth to 60% of the country’s crypto trading volume. The market share growth began with the approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) on January 10.
The revised rating of COIN stock portrays a broader surge witnessed by the crypto prices to test unprecedented levels. The uptrend in the crypto sector replicates the substantial surge in the daily trading volumes executed on Coinbase.
Coinbase Realize Record Trading Volume
The trading volume surpassed the levels witnessed in 2021. In particular, the Brian Armstrong-led exchange saw nearly $5 billion trading volume following the spot Bitcoin ETFs listed on January 11.
Coinbase had not matched the trading volume on any day of last year. The amount edged closer to rivaling the amount witnessed when rival FTC filed bankruptcy in late 2022, per BitDegree data.
Coinbase volume has tested its highest ever, coinciding with the Bitcoin price rallies that set a new price level. A review of data from CoinGecko and BitDegree indicates daily volume closer to $12 billion on March 6.
The high trade volume occurs when Coinbase crashes to indicate nil balances during the high volatility.
The revision of the Coinbase rating saw Goldman Sachs increase its revenue projection by 48%, starting in early February. The San Francisco-headquartered crypto exchange realized a price increment following the $273.4 million profit revelation.
Goldman Sachs Bullish on Coinbase
The quarterly profit underscores Coinbase’s progress since it incurred a $557 million loss in a similar period 12 months ago. It affirmed a remarkable turnaround, given that it reported a $2.2 million loss in the third quarter of 2023. During the Sell rating announcement, Goldman Sachs called for a cautious view of the crypto market in the long term. In the past, the investment bank harbored concerns over the limited use cases attained by cryptocurrencies beyond trading.
Goldman Sachs cited the inability to establish alternative use cases of crypto to question the sustainability of growth realized by exchanges such as Coinbase. Nonetheless, the recent performance and increased adoption rates necessitated the reevaluation.
Besides the rating upgrade, Goldman Sachs departed from the earlier price target to forecast $282. The new price target indicates the optimism in the investment bank’s short-term outlook for Coinbase to benefit from the ongoing crypto market rally.
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