Bitcoin hit a seven-week low and again fell below $40,000 despite the initial excitement surrounding the approval of several spot exchange-traded funds (ETFs).
Bitcoin price witnessed a robust surge in the past year amid expectations that the Securities and Exchange Commission (SEC) would greenlight ETFs directly tracking its price — a first for U.S. markets.
However, the cryptocurrency’s performance post-approval has been lackluster, contrary to predictions of a significant price surge fueled by increased institutional capital.
Moreover, JPMorgan analysts lowered their rating on the stock to Underweight from Neutral on the risk that the 2023 positive catalyst – Bitcoin ETF approval – could reverse in 2024.
“While we continue to see Coinbase as the dominant U.S. exchange in the cryptoecosystem and a leader in cryptocurrency trading and investing globally, we think the catalyst in Bitcoin ETFs that has pushed the ecosystem out of its winter will disappoint market participants,” analysts said in a note.
With Bitcoin prices under pressure in recent days, analysts see “greater potential for cryptocurrency ETF enthusiasm to further deflate, driving with it lower token prices, lower trading volume, and lower ancillary revenue opportunities for firms like Coinbase.”
Hence, analysts see “the potential for 2024 to be a more challenging year for Coinbase’ stock, despite what we see as continued progress in various meaningful initiatives including its buildout of derivatives and its Layer-2 Base.”
JPMorgan analysts also cut the price target to $80 per share, signaling a downside risk of about 35% from current prices.
Source: Cryptocurrency - investing.com
