The recent rally by Coinbase will not be supported by second-quarter earnings or the approval of bitcoin ETFs, according to Bank of America.
Coinbase's core business has been under pressure over the past year, with trading volumes remaining low as bitcoin and other cryptocurrencies are stuck in a bear market.
But the stock has rallied sharply over the past month, apparently spurred by applications for bitcoin ETFs from BlackRock and other asset managers.
"Despite 2Q data suggesting COIN will materially miss top-line estimates, COIN shares have rallied ~60% since 6/15 on the news of spot Bitcoin ETF applications filed by Blackrock and others.
In fact, the approval of of bitcoin ETFs could hurt Coinbase if their customers shift to using ETFs instead of trading the cryptocurrency directly on the exchange, Kupferberg said.
Persons:
Coinbase, Jason Kupferberg, Kupferberg, — CNBC's Michael Bloom
Organizations:
Bank of America, Securities and Exchange Commission, SEC, Blackrock, Barclays
Locations:
BlackRock