Goldman Sachs sees significant upside potential for Coinbase stock

Goldman Sachs puts Coinbase’s fundamental value at $306 per share, about 36% above the May 24 close, according to CoinDesk.

One of the biggest players on Wall Street projects Coinbase’s earnings per share of $8.09, $4.90 and $4.95 for 2021-2023 respectively.

Analysts described the company’s securities as “the best way to gain exposure to the expansion of the cryptocurrency ecosystem.” The 54-page report contains analysis of the decentralized finance space, the exchange’s competitors, and digital assets.

The authors of the document are convinced that the crypto market will continue to expand and its role in the financial industry will grow.

Experts noted Coinbase’s potential when engaging with the DeFi space, although DeFi is generally viewed as a competitor to centralized exchanges. They believe this sector is still in its infancy, based on the ratio of TVL to the overall cryptocurrency market capitalization.

According to analysts, Coinbase will maintain a 30% share of the crypto-fiat exchange market, and retail-investor trading commissions will remain the dominant component of its revenues.

A certain risk stems from intensified competition, which could reduce the size of brokerages’ fees. This will be mitigated by market volatility and the expected growth in user numbers.

Analysts described Coinbase’s custody services as the “fundamental” backbone of its business. In addition to attracting institutional investors, this segment is set to gain momentum from staking in light of Ethereum’s anticipated move to the consensus mechanism Proof-of-Stake.

Among other growth drivers they highlighted: payments, NFTs and lending products.

Coinbase fell amid Bitcoin’s slump. By the close on May 24 the figure stood at $48.9 billion. Previously, as a result of direct listing of shares, it had surpassed $85 billion. Earlier, New Constructs CEO David Trainer valued Coinbase’s total market capitalization at $18.9 billion.

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