Coinbase’s stellar Q4 earnings, fueled by the launch of spot Bitcoin ETFs, have drawn cheers from many analysts. However, a J.P. Morgan analyst throws a wrench into the celebration, raising concerns about the true impact of this new venture.
ETF Earnings: Booming or Murky?
While the ETFs contributed to Coinbase’s success, J.P. Morgan analyst Kenneth Worthington remains skeptical. He points out the lack of transparency surrounding the ETF business, particularly the custodial services provided for eight of the ten funds.
Worthington criticizes the company’s “media attention and market anticipation” surrounding the ETFs, arguing they haven’t provided enough details on the “economics of the arrangements with issuers.” He questions whether the potential monetization outweighs the possible loss of trading volume on Coinbase’s own platform.
Analyst Divide: Bullish or Cautious?
Despite Worthington’s skepticism, the overall analyst sentiment towards Coinbase has shifted positive after the earnings report. Wedbush, JMP Securities, and KBW have raised their price targets and ratings, signifying a broader belief in the company’s future.
ETF Impact: Friend or Foe?
One key concern raised before the ETF launch was the potential for investors to migrate away from exchanges like Coinbase towards the easier access offered by ETFs. However, Coinbase claims no such shift has occurred, echoing similar statements from Robinhood.
