According to a recent research report from Wall Street broker Cantor, Coinbase (COIN) is not merely a cryptocurrency trading platform.
Cantor has given the crypto exchange an overweight rating with a price target set at $245. In early trading, the stock rose by over 5%.
Analysts Brett Knoblauch and Thomas Shinske noted, “The market seems to overlook what Coinbase is achieving beyond trading, especially regarding its Layer 2 solution (Base) and collaboration with Circle on stablecoins.” The report highlighted that Coinbase shares are appealing right now, trading at approximately a 32% discount to their historical valuation multiples.
Cantor believes that both of these areas are “crucial in shifting the perception of COIN from a cyclical trading platform to an essential infrastructure in the cryptocurrency ecosystem.”
The report predicts a positive re-rating for the shares once investors gain better insight into the earnings potential of Base and the stablecoin sector.
The benefits of Base are emphasized in the report, which points out that its robust user growth generates a “flywheel effect,” resulting in increased transaction fees for the exchange.
Additionally, Cantor pointed out that the market is undervaluing the stablecoin opportunity, noting these digital currencies’ potential to challenge traditional financial systems for cross-border payments.
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