Coinbase Could Be One of Crypto’s Long-Term Survivors: Oppenheimer

The investment giant’s senior analyst is relatively optimistic the crypto exchange could stick around after crypto’s ice age finally melts.

AccessTimeIconJan 11, 2023 at 5:44 p.m. UTC
Updated May 9, 2023 at 4:05 a.m. UTC

Coinbase (COIN) could be one of the crypto ecosystem’s few remaining players as a crypto winter continues to hit all corners of the industry, Owen Lau, a senior analyst at investment firm Oppenheimer, told CoinDesk TV’s “First Mover.”

“If many companies or if some companies go under, Coinbase could be one of the survivors in the space,” Lau said.

Lau has an outperform rating on COIN, with a price target of $73 in the next 12 to 18 months. In a note published on Monday, Lau predicted there will be “less than five legitimate crypto exchanges,” with Coinbase being one of them.

According to him, if the U.S. Federal Reserve continues to raise interest rates, half of Coinbase’s revenue could be made up of the exchange’s subscription services, which are tied to a partnership with stablecoin issuer Circle. In addition, the “many positives” that have yet to be priced into the exchange’s stock include Coinbase's market share gains, its strong balance sheet and its short squeeze potential, he said.

Oppenheimer forecasts Coinbase’s 2022 revenue to come in at $3.2 billion, a steep drop from its revenue in 2021, which reached $7.8 billion. Coinbase is expected to report fourth-quarter earnings toward the end of February.

But whether the exchange will make good on its promise to drive revenue via subscription services remains to be seen. Its biggest revenue source is from trading, though that is in peril given retail investors’ waning appetite and confidence in crypto.

Oppenheimer’s estimates were issued Monday, one day before Coinbase said it would be laying off 20%, or roughly 950 people, from its workforce. In June, the exchange laid off more than 1,000 people.

“Given that COIN has a more regulated and compliant platform, leading position in digital assets space, strong balance sheet and high brand recognition, we believe COIN is well positioned to emerge stronger,” Lau wrote in his note.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Fran Velasquez

Fran is CoinDesk's TV writer and reporter.


Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.