.July 29, 2024 04:57 PM

JPMorgan analysts raised their price target for Coinbase Global (NASDAQ:COIN) to $181 from $171 ahead of the company’s Q2/24 earnings report on August 1. The approval of U.S. Ether spot ETFs in May boosted the market, despite contractions in April and June, resulting in mixed performance for the quarter. The total crypto market cap fell by 14% in Q2/24, slightly better than expected, leading to an increase in estimated assets under custody to $302 billion. Coinbase’s total trading volumes in Q2/24 reached $218 billion, down 29% sequentially but up 136% year-over-year.

The analysts project transaction revenue to be around $720 million, with retail spot fee rates at 160 basis points and institutional fee rates at 3 basis points. There was a shift towards lower fee rate institutional volumes, particularly due to interest in spot Bitcoin ETFs, which attracted approximately $2.4 billion in new capital during the quarter. Coinbase’s derivatives products showed more resilience, with volumes and transaction fees down by about 15-20% sequentially in Q2 2024.

Activity on Coinbase’s Base platform slowed during the quarter, but profitability surged following Ethereum’s Dencun Upgrade in mid-March 2024, leading to nearly 100% margins on Base-related revenue. Expenses are expected to align with the Q2 outlook, resulting in an adjusted EBITDA margin of approximately 42%. The analysts remain Neutral on Coinbase, with the updated December 2024 price target of $181 reflecting a higher assumption for the total crypto market cap.