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Compass Point, a financial research firm, provided information on the latest developments in the cryptocurrency market on Monday. (BTC) and Ethereum (ETH) prices have remained relatively stable since the company’s latest report, with Bitcoin recovering near $43,000 after a dip below $40,000. This rebound is attributed to the influx of stablecoins into exchanges and dwindling Bitcoin balances on these platforms, suggesting that investors may be buying to hold their position for the long term.
Grayscale Bitcoin Trust (GBTC) saw around $5.6 billion in outflows, which may have contributed to the selling pressure, but this trend appears to be slowing. Interestingly, Bitcoin ETFs have collectively seen inflows of around $1.5 billion. Notably, BlackRock’s Bitcoin Trust (IBIT) has seen higher volumes than GBTC.
Shares of Bitcoin miners saw little movement or fell as the hash price fell, influenced by lower transaction fees and an increase in the hash rate. Furthermore, the upcoming halving event, which reduces the reward for mining new blocks, affects their prices. Despite these challenges, Compass Point maintains a positive view on Core Scientific (NASDAQ:CORZ), viewing the stock as significantly undervalued at 1.25x EV/EBITDA based on CY25 estimates. The company expects Core Scientific to recover from initial selling pressure following the bankruptcy.
Coinbase (NASDAQ:) also received a favorable rating, with a “Buy” rating and a $200 price target. Compass Point believes that concerns about Coinbase losing market share due to the emergence of ETFs are overblown. The firm notes that Coinbase has gained market share through January, with average daily volumes exceeding both its own and consensus estimates. The rising market capitalization of USD Coin (USDC), which has grown by around 10% year-over-year, is considered a positive sign for Coinbase’s interest income.
Looking ahead, Compass Point expects the cryptocurrency market to move sideways to slightly higher in the coming weeks, before potentially resuming an uptrend in CY24. The firm also suggests that any perceived weakness from US banks could benefit Bitcoin prices, drawing a parallel to the market dynamics seen in March 2023.
Insights from InvestingPro
As Coinbase (NASDAQ:COIN) has a “Buy” rating from Compass Point with a $200 price target, current data and recommendations from InvestingPro provide additional context for investors considering the stock. According to real-time metrics, Coinbase has a market capitalization of $30.85 billion. Despite the company’s significant presence in the market, data reflects that Coinbase is currently trading at a price-to-value multiple of 5.21, indicating that the stock may be priced high relative to the company’s net worth. Furthermore, the company has not been profitable over the trailing twelve months, with a negative P/E ratio of -40.96, adjusted to -25.69 over the trailing twelve months as of Q3 2023.
InvestingPro tips highlight that Coinbase’s share price movements have been quite volatile, with a substantial return of 52.42% over the past three months and a rise of 42.6% over the past six months, but that in the last month went badly with a return of -17.8%. These fluctuations highlight the unpredictable nature of the stock in the short term. Analysts also don’t expect the company to be profitable this year, which could be a critical consideration for investors seeking short-term returns.
For investors intrigued by these insights, additional InvestingPro tips are available that can further inform investment decisions. InvestingPro membership is now on special sale for the new year with up to 50% off. Use the coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a subscription 1 year InvestingPro+. These tips offer a more complete understanding of Coinbase’s financial health and market potential, which could be valuable in making a well-informed investment choice.
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