According to Bloomberg News, a JPMorgan analyst has revised his previously bearish outlook on Coinbase Global Inc. (NASDAQ: COIN), propelling the stock to climb as much as 7.8% on February 15. This change comes just weeks after the analyst downgraded the stock, a move that now seems to be reconsidered in light of the recent surge in cryptocurrency prices, including Bitcoin’s notable ascent past $52,000, marking its highest value since 2021.

The Bloomberg report said that Kenneth Worthington, the analyst in question, upgraded Coinbase to a neutral rating, influenced by the cryptocurrency market’s buoyant performance. His decision is particularly significant as it reverses his January prediction that the enthusiasm for the US-listed spot Bitcoin ETFs might wane. Contrary to his expectations, these funds have shown robust performance on key trading metrics, contributing to the renewed optimism in digital asset investments.

Worthington’s reassessment is rooted in the recent influx of investments into the new spot Bitcoin ETFs and the appreciable rise in the prices of major cryptocurrencies like Bitcoin and Ethereum. He anticipates that the elevated cryptocurrency prices will not only persist but also enhance Coinbase’s activity levels and earnings potential, especially looking towards the first quarter of 2024.

Despite a rocky start to the year, with Coinbase’s stock dipping nearly 8% through the close of Wednesday, the company’s shares had previously seen a nearly 400% surge in 2023. Wall Street’s opinion on Coinbase remains mixed, with analysts almost evenly split between buy, hold, and sell recommendations. However, Worthington has maintained his $80 price target on the stock ahead of Coinbase’s earnings report, expected to be released after the market closes on Thursday.

Worthington further elaborated on Coinbase’s business model, which thrives on higher token prices due to its transaction-based revenue. He argues that the increased value and velocity of token prices should naturally boost trading volumes, benefiting Coinbase’s bottom line.

In related news, CoinDesk reported that ARK Invest, led by Cathie Wood, sold Coinbase stock for the first time in a month on February 14, just a day before the crypto exchange’s Q4 2023 earnings report comes out. ARK divested $34.3 million worth of shares from three different funds, marking its first sale since January 11. This move comes amidst expectations for Coinbase to report stronger earnings and revenue, driven by a surge in trading volume as the crypto market rallied, a trend also reflected in Robinhood’s 10% increase in crypto revenue for Q4 2023.

Featured Image via Coinbase