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Coinbase stock is relatively dependent on the cryptocurrency industry which can explain its volatility.
Coinbase Global Inc (NASDAQ: COIN) stock was up approximately 2% on Monday, May 24 at 9.46 am EDT and trading around $228.85 according to market analytics provided by MarketWatch. The rebound coincided with a rebound that happened in the cryptocurrency market during the past 24-hours whereby Bitcoin, Ethereum, and Binance Coin were up approximately 11.5%, 22%, and 28% respectively.
Coinbase stock is relatively dependent on the cryptocurrency industry thus a close relationship in their volatility. Essentially, COIN stock drops in value every time that Bitcoin depreciates and the vice versus when Bitcoin value appreciates.
Coinbase Stock and Cryptocurrency Market
According to analysts at Goldman Sachs Group Inc (NYSE: GS), COIN stock is poised to grow exponentially in the quarters to come based on market fundamentals. Notably, the analysts initiated a Buy call on Coinbase stock with a price target of $306 in a year.
In their capacity, Goldman Sachs analysts believed Coinbase is well-positioned to benefit from an ecosystem that is experiencing high growth. Moreover, the increased demand is an aspect that the analyst pointed out to be a spell in an imminent bull market.
Additionally, Goldman Sachs analysts initiated a Buy call on COIN stock in the next twelve months based on increasing adoption by institutional investors. Most importantly, the Goldman Sachs analysts highlighted that Coinbase is established in a volatile market and likely to thrive in the said conditions. Furthermore, the company collects revenue from exchange fees on the different digital assets offered on the platform.
In terms of future prospects, Goldman Sachs directed the point to an unpredictable cryptocurrency market. Noting that Coinbase future success heavily relies on the success or failure of the crypto market.
“While we believe the core business today offers an attractive growth profile with the potential to drive new high levels of profitability, we see significant white space for new initiatives to drive more stable and recurring revenue streams to complement the core trading business over the longer term,” Goldman Sachs analysts said.
Whilst Goldman Sachs’ analysts predict upside volatility on the Coinbase market in the near future, Bloomberg reported that Wall Street analysts are grappling to fathom the dynamics brought forth by the cryptocurrency market.
Notably, some Wall Street analysts foresee darker days for Bitcoin before experiencing a rebound.
According to serial entrepreneur and billionaire Mark Cuban, new money will have to come into the crypto space to secure a bull market. “I think this is the “Great Unwind”. Traders borrow to buy Eth, used eth to borrow alt/stable coin, used that to LP a high APY Pair, took the SLPs, and staked them to maxout yield. The minute Eth drops to their Tragic Number, they had to Unwind. Unstake, Remove Liqudity, Repay,” Cuban explained through a tweet.