Exchange: Coinbase stocks (COIN) risks a 35% drop... Here's why

On the stock exchange, the launch of spot Bitcoin ETFs has impacted the share prices of crypto companies, notably Coinbase. An analysis by JPMorgan suggests that the COIN stock, listed on Nasdaq, could see significant drops and descend to $80. The analysis cites two main reasons…

Stock Market: Potential Downward Trend for COIN Stock According to JPMorgan

Over these last 13 days, a decline in the digital asset market can be observed. Additionally, the stock prices of companies related to crypto on the stock market have also fallen.

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

Indeed, the financial giant estimates that the price of the Coinbase stock could drop to $80. This represents a 30% decrease compared to its current stock market quote, which is $124.19.

« We downgrade Coinbase to Underweight… After greatly outperforming in 2023 (COIN +390% versus SP500 +26%), we see the potential for 2024 to be a more challenging year on the stock market for Coinbase stock.« 

A Drop Due to Bitcoin ETFs?

The analysis suggests two main reasons for this potential decline. First, there is a waning interest in spot Bitcoin ETFs. This indeed led to a decrease in volumes and revenues for Coinbase. Furthermore, a significant drop in COIN’s stock price has been noted since the launch of the BTC ETFs following the SEC’s approval.

« …with Bitcoin falling below $40,000… we see greater potential for the deflation of enthusiasm for ETFs leading to a drop in trading volume and a decrease in revenues for companies like Coinbase.« 

Then, analysts also expect a drop in digital asset prices, leading to decreased revenues.

As Coinbase is at the center of Bitcoin ETFs, it appears that its stock market price is paying the price. Nevertheless, a critical support level around $114.43 could support the COIN stock price.