“Concerns over Bitcoin Spot ETF Frenzy Diminish as JPMorgan Lowers Coinbase Stock Rating to ‘Underweight'”

"Concerns over Bitcoin Spot ETF Frenzy Diminish as JPMorgan Lowers Coinbase Stock Rating to 'Underweight'"

"Concerns over Bitcoin Spot ETF Frenzy Diminish as JPMorgan Lowers Coinbase Stock Rating to 'Underweight'"

According to a report by CoinDesk, JPMorgan stated in a research report on Monday (22nd) that the launch of a major positive catalyst in the cryptocurrency market, Bitcoin spot ETF, could undergo a transformation in 2024 and disappoint investors. Therefore, the investment bank has downgraded the stock rating of Coinbase (COIN), a US cryptocurrency exchange, to “underweight”.

JPMorgan has downgraded the rating of $COIN from “neutral” to “underweight” with an unchanged target price of $80. COIN closed at $124.19 on Tuesday (23rd), down 3.14%. JPMorgan stated that although the exchange has made progress in many important initiatives, it may face more challenges in 2024 after the stock rose by 390% last year.

The analyst team led by Kenneth Worthington wrote in the report:

The report pointed out that analysts are concerned that any disappointment in the flow of ETF funds, given people’s enthusiasm for Bitcoin ETF and the influx of new funds into the cryptocurrency ecosystem, could severely impact the sentiment driving the cryptocurrency rebound. This market sentiment has mainly manifested itself in the second half of 2023, especially in the rising trend since October.

JPMorgan pointed out that the price of Bitcoin has been under pressure, falling below $40,000, and the bank believes that the enthusiasm for cryptocurrency ETFs may further diminish, leading to a decline in coin prices, reduced trading volume, and reduced secondary revenue opportunities for companies like Coinbase.

The report also added that if Ethereum (ETH) spot ETF is approved, Coinbase is expected to serve a similar custodial, supervisory, and trading role.

Peter Schiff: Investors in Bitcoin spot ETF will experience “worse results”

Peter Schiff, a long-time critic of Bitcoin, is also not optimistic about Coinbase’s subsequent performance. He stated on X platform that although Coinbase holds the Bitcoin held by these ETFs, speculators who previously traded Bitcoin through Coinbase are now turning to spot ETFs. In addition, many investors who originally purchased $COIN as a substitute for Bitcoin are now buying these ETFs.

With the recent decline in the cryptocurrency market, Schiff continues to criticize Bitcoin and those who publicly favored Bitcoin before the launch of spot ETFs, and believes that all Bitcoin spot ETFs are now in a bear market, meaning a decline of 20% or more from the high point.

Schiff also mentioned ProShares’ first-ever US Bitcoin futures ETF “BITO,” launched in October 2021, which has fallen by over 50% in over two years. He believes that investors who buy any of the 11 Bitcoin spot ETFs will experience worse results.