Coinbase : Amazon of Bitcoin Status Not for a long time, according to Bank of America
August 25, 2021 6:37 AM
Is Coinbase (COIN) too ambitious? The Bank of America is questioning the exchange's ability to realize its ambition to become the Amazon of Bitcoin and crypto assets. The US bank is waiting to see the concrete progress of Coinbase before pronouncing favorably on this subject.
List all cryptocurrencies: it's too early!
Bank of America launched a cover of Coinbase Global. On August 14, 2021, Jason Kupferberg, senior equity research analyst at Bank of America Merrill Lynch, finally assigned a "neutral" rating to Coinbase, and a price target of $273.
Kupferberg has indeed been skeptical of the exchange's vision of becoming "the Amazon of crypto-assets". Coinbase CEO Brian Armstrong articulated this vision on August 10, 2021, during the company's Q2 2021 earnings conference call:
“We want to be the Amazon of assets, listing all crypto assets that are legal. There are thousands of them today. There will eventually be millions. All this under the theme of adopting decentralization. "
Kupferberg readily recognizes the exchange as "the leading provider of crypto infrastructure," but believes that Coinbase is still at an early stage in its development on this ambitious vision, and that its share price rise may be. limited in the short term:
"COIN aims to become the Amazon of crypto-assets, although we believe COIN's model is still at a very early stage of development, and we are awaiting more concrete signs of progress against the long-term vision. corner. "
Coinbase: diversification to favor, volatility to predict
Trading fees generate 95% of the income from the exchange. Kupferberg wants the latter to diversify in order to have other sources of income. Bank of America predicts a 440.1% increase in Coinbase revenue for 2021. However, it predicts a 4.2% decline in 2022.
Coinbase's stock price has been extremely volatile since it was listed on the NASDAQ in April 2021, and Kupferberg believes that this volatility is expected to continue into 2022.
Coinbase's belly dancing didn't have the desired effect on Bank of America. The exchange certainly shows entrepreneurial aggressiveness in formulating such an ambitious vision. But customers are now expecting "more basic things" from the exchange, such as a platform free from recurring technical issues.