Shares of Coinbase (COIN) rose as much as 6% on Friday after investment bank Oppenheimer raised the rating of the stock to “outperform” from “perform” with a price target of $160 per share, arguing that the company is strong and its management team is tough.

"The stock was under extreme scrutiny during crypto winter. While many peers went under, COIN is still standing and fighting for its businesses and the industry. We believe the company is stronger than many people realize, and the management team is tougher than most investors think," analyst Owen Lau wrote in a note.

The upgrade is based on multiple factors, including a “good chance” that Coinbase will win its lawsuit against the Securities and Exchange Commission (SEC) or that the court will dismiss the case.

Another driving force is the recent approval of ten spot bitcoin exchange-traded funds (ETFs) for which Coinbase serves as a custodian for several issuers. This will not only bring the company revenue by being a key part of the infrastructure but will benefit from the new wave of investors, increasing adoption and higher trading volume, Lau said.

The upgrade comes after JPMorgan downgraded the stock earlier this week to an underweight rating, citing a disappointing bitcoin ETF catalyst.

With the current low fees for trading the ETFs – some at 0% for the first six months or until the fund reaches a certain amount of assets – investors trading on crypto exchanges could be swayed to put their money in the ETFs instead of trading on platforms such as Coinbase, but Lau doesn’t see that happening. Instead, he said that the vast majority of retail traders will likely keep their money on the exchange as it allows them to engage in other blockchain use cases.

Lau also noted the higher trading volume that Coinbase has seen since the start of the year and predicts that volume will continue to increase over the next two years as the Federal Reserve is looking to cut interest rates this year and as the industry is awaiting the bitcoin halving in April. Trading volume could increase as much as 66% year-over-year, Lau said.

Shares of Coinbase rose more than 400% last year, driven by a broader crypto market recovery after a tumultuous 2022. The stock is down more than 20% this year, underperforming the broader crypto market. The CoinDesk 20 index, a benchmark that tracks the 20 largest crypto assets, shows a decline of roughly 11% year-to-date.

However, for the year ahead, Lau sees a good chance that Coinbase could become a profitable company for the first time since the fourth quarter of 2021, as he estimates 25% growth year-over-year.