By George Ward
On Monday, analysts at Jefferies stated that Coinbase Global Inc. would eventually escape the consequences of FTX’s demise. After the FTX collapsed, Jefferies predicted that Coinbase would face “acutely strained” conditions as retail consumers pulled out of cryptocurrency.
Coinbase may be among the few to profit from the fall, unlike most cryptocurrency exchanges with massive exposure to the FTX crash. The collapse of FTX affected the whole crypto industry, pulling several businesses down with it.
The exchange’s sudden crash sparked concerns about the crypto ecosystem’s validity, safety, and security. While many exchanges are having trouble during the current crypto winter, Jefferies’ analysts think Coinbase will be the greatest beneficiary of FTX’s demise.
The Jefferies analysts discussed how Coinbase kept its reputation as a premium brand. They describe the cryptocurrency firm as an onshore, regulated, and financially sound organization.
Analysts believe Coinbase would survive the industry-wide repercussions brought on by the bankruptcy of FTX due to its solid financial sheet. “The immediate impact is certainly negative,” they continued, “with trade volumes coming under increased pressure.”
As FTX Crashes, Coinbase Starts To Rise
Meanwhile, an analytics firm COWEN released its latest bulletin about top crypto and stock portfolios for investor consumption purposes. Accordingly, the broker issued a hold rating on the crypto market and predicted that Coinbase’s share price would be $35.
Nevertheless, the rating comes after COWEN downgraded COIN on Thursday from outperform to market perform. Cowen claims that the lowering results were due to a lack of clarity regarding a potential comeback in trading volumes following the FTX incident.
Shares of Coinbase increased 15.6% to $38.27 following the report’s release. “We anticipate COIN to reclaim some of its share losses from the past two or more years, and we predict that BTC will rebound to about $25,000,” the analyst said.
The experts did not omit to emphasize the possibility of future harm to the exchange. After the FTX collapsed, Jefferies predicted that Coinbase would face “acutely strained” conditions as retail consumers pull out of cryptocurrency.
However, the firm has the financial stability to ride out any potential storm. The memo also stressed Coinbase’s potential to profit from the fall of FTX as a legal, publicly traded, and audited firm.
According to them, FTX’s crash provides Coinbase with fewer competitors and the opportunity to reclaim market dominance.