Default image

Crypto Currents: Coinbase initiated with Outperform rating

  • 21.03.2025 08:51
  • markets.businessinsider.com
  • Keywords: Coinbase, Strategy

Coinbase received an "Outperform" rating from Bernstein, with expectations of growth driven by regulatory support and market expansion. Strategy increased its Bitcoin holdings, reflecting confidence in cryptocurrency adoption. Bakkt reported strong Q4 results but faces challenges including potential business divestitures and loyalty program issues.

Coinbase NewsCoinbase ServicesCoinbase ReportsCOINsentiment_satisfiedSTRKsentiment_satisfied
open_in_newOriginal article

Estimated market influence

Coinbase

Coinbase

Positivesentiment_satisfied
Analyst rating: Buy

Initiated with Outperform rating by Bernstein and Goldman Sachs, expected to benefit from regulatory framework.

Strategy

Strategy

Positivesentiment_satisfied
Analyst rating: —

Bought more Bitcoin, received coverage from Monness Crespi with a fair value estimate.

Context

Business Insights and Market Implications Analysis

Coinbase

  • Bernstein Initiation: Bernstein initiated coverage of Coinbase with an Outperform rating, citing strong regulatory tailwinds and U.S. efforts to establish itself as the "crypto capital of the world."
  • Goldman Sachs Caution: Goldman Sachs assumed coverage with a balanced view, noting upside from higher crypto prices and potential regulatory reform but also risks like lower crypto prices and increased competition.

Strategy

  • Bitcoin Purchases: Strategy purchased 160 bitcoins for $82,981 each, bringing total holdings to ~499,226 bitcoins acquired at an average price of $66,360.
  • Monness Crespi Analysis: Monness Crespi expects declining implied volatility on Bitcoin, questioning the sustainability of Strategy's value add and potential limitations in equity issuance.

Bakkt

  • Q4 Results: Bakkt reported a net loss of ($2.95) on revenue of $1.8B, up from ($0.29) on $214.5M in Q4 2023.
  • Revenue Guidance: Guided Q1 revenue to $1.03B-$1.28B and end-of-quarter cash to $22M-$26M.
  • Strategic Moves:
    • Appointed Akshay Naheta as co-CEO.
    • Sold Bakkt Trust Company for $1.5M plus regulatory capital requirements.
    • Exploring strategic alternatives for its Loyalty business segment, including potential sale or wind-down.

Riot Platforms

  • HPC Expansion: Riot sees significant upside in High-Performance Computing (HPC) beyond mining, targeting a 600MW HPC build at Corsicana to come online by 2026.
  • Roth MKM Analysis: Analysts expect growth in core crypto business and expansion into HPC driven by AI demand.

IREN

  • Grid Connection Agreement: Signed for Sweetwater 2, advancing a 2GW data center hub in West Texas.
  • Strategic Focus: Aligning infrastructure with global AI and cloud computing firms, aiming to energize Sweetwater 1 in April 2026 and Sweetwater 2 in 2027.

Market Trends

  • Crypto Adoption: Bernstein and Monness Crespi highlight growing investor interest in Bitcoin and crypto assets.
  • Regulatory Impact: U.S. regulatory framework expected to drive industry growth, though competition from traditional financial services may increase.
  • Price Action: Bitcoin remained flat at $83,500 during the week.

Competitive Landscape

  • Publicly Traded Companies: Includes Bit Digital, Coinbase, Core Scientific, Greenidge Generation, Holdings, Strategy, Riot Platforms, and TeraWulf.

Long-Term Effects

  • Regulatory Risks: Potential regulatory reforms could expand market size but also attract new competitors.
  • Technological Advancements: Focus on HPC and AI-driven infrastructure suggests long-term shifts in data center demand.