Coverage of United States cryptocurrency exchange Coinbase with a buy rating following a major crash on crypto markets, has been initiated by Wall Street megabank Goldman Sachs.
Coinbase stock is the best way for investors to gain exposure to the crypto industry as contained In a note to clients on Monday and Goldman Sachs analyst Will Nance. Shares of crypto companies like Coinbase should be regarded as a hedge against the parabolic volatility of cryptocurrencies like Bitcoin (BTC), according to the report.
“While we believe the core business today offers an attractive growth profile with the potential to drive new high levels of profitability, we see significant white space for new initiatives to drive more stable and recurring revenue streams to complement the core trading business over the longer term,” the analysts reportedly wrote.
In the buy rating for Coinbase shares, Goldman Sachs analysts set a 12-month price target of $306, implying a share price increase of 36%. However, Coinbase’s longer-term fate will depend on the continued success or failure of cryptocurrencies as an asset class, the client note reportedly reads.
Following the newly initiated buy rating, shares of COIN rose nearly 3.5% to over $235 in premarket trading. The stock debuted on Nasdaq on April 14 at a price of $381. The price rebound comes in line with a notable uptick on crypto markets, with Bitcoin surging more than 4% over the past 24 hours to trade above $37,400.
The latest buy rating is not the first time that Goldman Sachs mentioned Coinbase as a successful stock. In late April, Goldman Sachs mentioned Coinbase as one of 19 U.S. stocks performing significantly better than the S&P 500.