According to CoinDesk, JPMorgan stated in a research report on Monday (22nd) that the launch of the main positive catalyst in the cryptocurrency market last year, the Bitcoin spot ETF, could undergo a transformation and disappoint investors in 2024. Therefore, the investment bank downgraded the stock rating of the US cryptocurrency exchange Coinbase (COIN) to “underweight”.
JPMorgan 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 greater challenges in 2024 after the stock rose 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 could significantly dampen the sentiment driving the rebound of cryptocurrencies, given people’s enthusiasm for Bitcoin ETFs and the influx of new funds into the cryptocurrency ecosystem. This market sentiment is mainly reflected in the second half of 2023, especially in the rally 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 wane, leading to a decline in prices, reduced trading volumes, and decreased revenue opportunities for companies like Coinbase.
The report also added that if an Ethereum (ETH) spot ETF is approved, Coinbase is expected to serve similar custodial, supervisory, and trading roles.
Peter Schiff: Investors who buy Bitcoin spot ETFs “will experience worse results”
Peter Schiff, a long-time critic of Bitcoin, also does not have a positive view on Coinbase’s subsequent performance. He stated on the 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 an alternative to 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, with a decline of 20% or more from the high point.
Schiff also mentioned the ProShares Bitcoin futures ETF “BITO” launched in October 2021, stating that the product has fallen more than 50% in over two years. He believes that investors who buy any of the 11 Bitcoin spot ETFs will experience worse results.
