Coinbase Stock Price Forecast December 2021 – Time to Buy COIN Stock?

Coinbase (NYSE: COIN) stock has been quite volatile this year. It went public through a direct listing and kept the reference price at $250. The stock had a bumper listing and went on to hit a 52-week high of $429.54. However, it fell thereafter and hit a low of $208.

COIN stock surpassed $350 in November but has since fallen and trades below $300. What’s the forecast for Coinbase stock and is it a good buy for 2022?

Coinbase stock recent developments

Coinbase has been trying to diversify its revenues base and is also focusing on institutional investors, NFTs, as well as the metaverse. Earlier this month, the company announced a partnership with Enfusion to offer crypto trading services for institutional investors.

“Enfusion’s connectivity with Coinbase Prime will allow us to seamlessly manage our crypto positions alongside other assets from a single interface, streamlining our trading operations. We’re very excited to see two platforms we rely on every day team up to continue improving how institutions access the crypto markets,’ said Eric Peters, CEO, and CIO of One River, a leading asset management firm.

68% of all retail investor accounts lose money when trading CFDs with this provider.

COIN is also a play on the metaverse

Metaverse has been getting a lot of attention and Facebook even changed the name of the company to Meta Platforms to reflect its new priorities. COIN also sees an opportunity for itself in the metaverse. In a blog post, Coinbase CEO Brian Armstrong said “We’re also working on technology that will allow you to purchase your avatar, define and maintain your public profile, and establish trust. And we’re working on features like Sign in with [Eth/Coinbase], which could allow users to sign into every app in the Metaverse.”

Coinbase is facing margin pressure

It has acquired mobile wallet company BRD and is also launching a marketplace for NFTs. There are concerns over margin compression for Coinbase as more companies enter the cryptocurrency exchange industry.

Coinbase acknowledges the risk and its CFO Alesia Haas said during the Q3 2021 earnings call that “We do think in the long term, though, zooming out a little, that we will see fee compression as more and more products will become commoditized in crypto.” She added, “And so, we’ve already begun focusing on diversifying our revenue.”

COIN stock forecast

Coinbase looks like a good stock to buy amid the digital transformation and the growing popularity of digital assets. Wall Street analysts have a consensus buy rating on the stock. Of the 25 analysts polled by CNN Business, 17 rate the stock as a buy while seven rate it as a hold. One analyst has a sell rating in COIN stock.

Its median target price of $400 implies an upside of almost 50% over current prices. Its lowest target price is $242 which is a discount of 9.7% while the highest target price of $600 is a premium of 124% over current prices.

Oppenheimer added Coinbase as a top 2022 pick

Earlier this week, Oppenheimer analyst Owen Lau listed Coinbase stock as a top pick for 2022. “For institutional investors who are interested in getting exposure to digital assets, we believe COIN is well-positioned to benefit from it,” they said in the note. Lau added, “More importantly, we are still in the early innings of this development, and we believe many investors are still on the sidelines.” Lau also believes that over time there would be more digital assets available for retail investors to transact.

However, last week, Mizuho had reiterated the stock as neutral. The brokerage is of the view that investing in bitcoin is a better investment than investing in COIN stock. Cathie Wood of ARK Invest also recently sold some Coinbase shares. She went on a buying spree in Coinbase shares after the stock tumbled following the strong listing. Despite selling some shares, COIN is still the second-largest holding for ARK’s fintech ETF. Block, which had changed its name from Square, is the largest holding for the ETF.

Coinbase stock long-term forecast

Over the long term, the higher fees charged by Coinbase are not sustainable. There is bound to be more competition even as the trading volumes are also expected to rise on higher adoption. Analysts expect the company’s revenues and profits to fall in 2022. However, higher engagement on the platform and the addition of new digital assets on the platform will help the company offset some of the revenue loss from lower fees. Also, the revenue diversification measures would pay off in the long term.

COIN stock technical analysis

Coinbase stock trades below the 30-day, 50-day, and 100-day SMA (simple moving average). The 14-day RSI (relative strength index) is a neutral indicator while the 12,26 MACD (moving average convergence divergence) gives a buy signal. COIN stock was in an uptrend in October and was hitting higher highs. However, the stock has been hitting newer lows since peaking in November. The stock meanwhile looks set for a breakout and recently rose above its previous high.

Should you buy Coinbase stock?

Coinbase stock trades at an NTM (next-12 months) 35.2x. The valuations don’t look unreasonable. The company is facing short-term hiccups amid concerns over margin pressure. However, as the company pivots towards other businesses and the adoption of digital assets expands further, COIN stock should rebound over the medium term.

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