Crypto exchange Coinbase is seeing its stock price surge on Thursday as BTIG analyst Mark Palmer reiterated his buy rating for the company and held its price target at $500.
Palmer reaffirmed his bullish view of the company after Coinbase Global Inc. COIN, +5.36%, the U.S.’s largest crypto exchange, announced that it was working on launching a platform for nonfungible tokens, and already had more than 1.35 million sign-ups, or reservations, for the NFT marketplace that is expected to challenge firms such as the popular OpenSeas.
Coinbase analysts have long argued that the crypto exchange needed to diversify its revenue base because fees related to the sale of digital assets were likely to compress as more players enter the scene.
“Our bullish thesis on Coinbase Global (COIN) has been predicated on our belief that, as the company diversifies its business and its revenue model becomes less dependent on retail transaction fees, the stock’s multiple would expand to reflect its enhanced stability,” wrote BTIG’s Palmer in a research note dated Thursday.
Coinbase NFT, is intended to be a peer-to-peer marketplace through which users can mint, collect, and trade the digital tokens.
NFTs are intended to be unique digital assets—such as art or collectibles—and aren’t meant to serve as a currency. In some cases, NFTs represent a form of authentication that exists on the blockchain.
“We’re making NFTs more accessible by building intuitive interfaces that put the complexity behind the scenes. We’re adding social features that open new avenues for conversation & discovery,” wrote Sanchan Saxena, vp of product, ecosystem at Coinbase, in the blog.
Palmer said that the popularity of NFTs has been “transformational for both marketplaces, including OpenSea, on which they are traded and the blockchain protocols such as Solana and Tezos that have facilitated their growth.”
Besides OpenSeas, another popular crypto exchange FTX also is planning to launch an NFT marketplace.
Meanwhile, Coinbase on Thursday released a proposal for comprehensive changes to of U.S. federal regulation of digital assets, urging Congress to create a new agency to regulate the industry under a different framework than is used to oversee the legacy financial services industry, MarketWatch’s Chris Matthews wrote.
Coinbase’s recent moves come as bitcoin and other crypto are starting to stage a fresh rally, with the world’s No. 1 asset on the verge of record highs not seen since May.
At last check Thursday, bitcoin BTCUSD, +3.98% was changing hands at $57,699 on CoinDesk, up 1.1%, Ether ETHUSD, +1.80% on the Ethreum blockchain was trading at $3,784 on Kraken, up 7.5% on Thursday afternoon.
Shares of Coinbase, meanwhile, were up 5.4% at around $260 and up 4.9% on the week so far, with a 13.2% gain over the past three months, FactSet data show. Thursday’s gain, if it holds, would mark Coinbase’s best since an 8.6% rally on Aug. 9.
By comparison, the Dow Jones Industrial Average DJIA, +1.56% was up 1.4% on the day, 0.3% on the week but down 0.2% over the past three months; and the S&P 500 index SPX, +1.71% was rising 1.6% on Thursday, 0.9% for the week and 1.3% over the past three months, while the Nasdaq Composite Index COMP, +1.73% was climbing 1.7% on the day, contributing to a 1.6% weekly gain and a 1.1% advance over the past three months.
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