Stock market: Coinbase (COIN) stock risks a 35% drop... Here's why

On the stock market, the launch of spot Bitcoin ETFs had an impact on the price of crypto companies, notably Coinbase. Analysis by JPMorgan suggests that COIN stock, listed on the Nasdaq, could see significant declines and drop as low as $80. The analysis cites two main reasons…

Stock market: a potential descent for COIN stock, according to JPMorgan

Over the past 13 days, we have noticed a decline in the digital asset market. But also, the stock price of crypto-related companies on the stock market has also fallen.

For Coinbase, its stock (COIN), listed on the NASDAQ stock exchange, has dropped 22% since January 11. Many are hoping for a rebound, but a relevant analysis from JPMorgan, reported by Walter Bloombergsuggests more decline.

Indeed, the financial giant believes that the price of Coinbase shares could go down to $80. This represents a 30% drop compared to its current stock market quotation, which is $124.19.

We are downgrading Coinbase to Underweight… After wildly outperforming in 2023 (COIN +390% vs. SP500 +26%), we see the potential for 2024 to be a tougher year in the stock market for Coinbase stock.

A fall due to Bitcoin ETFs?

The analysis suggests two main reasons for this potential descent. First, there is interest in spot Bitcoin ETFs waning. This has indeed led to a decline in volumes and revenue for Coinbase. Moreover, we have noticed a significant drop in the price of COIN on the stock market since the launch of the BTC ETFs after the approval of the SEC.

“…with Bitcoin falling below $40,000… we see greater potential for deflating enthusiasm for ETFs bringing with it falling trading volume and lower revenue for companies like Coinbase.

Then, analysts also expect a fall in digital asset prices, leading to lower revenues.

While Coinbase is at the center of Bitcoin ETFs, it appears its stock is paying for it. Nonetheless, there is critical support around $114.43, which could support the COIN stock price.

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