🌎 Coinbase Stock Soars 5% as Bitcoin and Altcoins Rebound

Coinbase stock price rose nearly 5% in the pre-market session as Bitcoin and other altcoins experienced a rebound. The stock traded at $242, marking a 15% increase from this month’s low of $210. Other crypto-related stocks, including Marathon Digital, Riot Platforms, MicroStrategy, and Core Scientific, saw gains exceeding 4%.

Cryptocurrencies Are Bouncing Back

The recovery in the market saw Bitcoin rise by 4%, reaching an intraday high of $67,240. Other notable gainers included cryptocurrencies like SATS, Aave, and Mog Coin (MOG). Generally, Coinbase and other industry stocks tend to rise when cryptocurrencies are recovering.

Despite the rebound, Coinbase stock remains in a technical correction, having dropped over 15% from its peak this year. This recovery is taking place in a low-volume environment, with data indicating a 5.4% drop in 24-hour trading volume on centralized and decentralized exchanges, totaling $80.6 billion.

Coinbase Earnings Ahead

The next key event for Coinbase stock will be the company’s quarterly results on Aug. 1. Analysts’ average estimate suggests the company made $1.41 billion in the second quarter. Estimates range from a high of $1.73 billion to a low of $1.23 billion.

If the average estimate holds true, it will represent a 98% year-on-year growth rate but a drop from the $1.64 billion earned in the first quarter. This decline is attributed to a quieter cryptocurrency market in the second quarter following a surge in Q1.

Data indicates that the volume in the DEX market peaked at $288 billion in March and has since dropped to $157 billion. Centralized Exchanges (CEX) have experienced a similar decline in volume.

Wall Street analysts project that Coinbase’s forward guidance will indicate annual revenue of $5.94 billion, a 91% increase from the same period in 2023.

The Bullish Case for Coinbase Stock

Most analysts maintain a buy or neutral rating on Coinbase stock. The average target price for COIN stock is $267, up from the current $231. In a recent note, an analyst predicted that the shares could surge to $1,700 in the long term. Citigroup also recently upgraded the stock from neutral to buy.

Supporters note that Coinbase is the largest crypto exchange in the United States, audited by Deloitte, and regulated by the Securities and Exchange Commission as a publicly traded company.

Additionally, Coinbase has diversified its business model and generates revenue from various sources. It has become the largest custodian of Bitcoin and Ethereum ETFs and is one of the biggest Bitcoin holders in corporate America, with 9,480 coins.

However, critics argue that the company is overvalued, with a market cap of over $60 billion, annual revenues of $2.92 billion, and a forward price-to-sales ratio of 34. The industry’s increasing competition has also led to a loss of market share for Coinbase to competitors like Bybit.

The earnings report on Aug. 1 will be crucial for investors, providing more insights into Coinbase’s operations, particularly its ETF custody business.