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Coinbase Stock Slips; Citi Initiates at Buy, Sees Wider Product Line

Coinbase is positioned to make 'higher highs and higher lows' as crypto adoption increases, Citi says.

Coinbase Global  (COIN) edged lower Tuesday after Citi analysts initiated coverage of the cryptocurrency exchange company with a buy rating and a $415 price target.

Shares of the Wilmington, Del., company at last check were off 2.1% to $318.83.

Citi analyst Peter Christiansen said in a research note that Coinbase's stock offers investors direct exposure to increased retail and institutional cryptocurrency adoption, according to the Fly.

As a crypto-economy facilitator, Christiansen said the shares are positioned to make "higher highs and higher lows" relative to crypto volatility as adoption increases. 

He also sees additional opportunities for Coinbase to benefit as the company potentially expands its offerings beyond facilitating transactions into cold wallet storage, prepaid debit cards and nonfungible tokens.

Also on Tuesday, Piper Sandler Richard Repetto boosted his price target for Coinbase to $360 from $335.

Repetto said that Bakkt, a digital asset platform recently brought public through a SPAC and owned 68% by Intercontinental Exchange  (ICE) - Get Intercontinental Exchange, Inc. (ICE) Report, announced an agreement with Mastercard  (MA) - Get Mastercard Inc. (MA) Report that "allows MA customers to provide broad cryptocurrency capabilities (buy, sell, hold digital currencies through custodial wallets driven by Bakkt) and even offer crypto debit and credit cards."

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"We believe this is another example pointing to the greater mainstream adoption of cryptocurrencies central to our positive thesis on COIN and its sole focus on servicing the crypto economy," said Repetto, who has an overweight rating on the stock.

On Friday, JPMorgan analyst Kenneth Worthington raised his price target on Coinbase to $375 from $372 while affirming an overweight rating on the shares. 

He said Coinbase had a solid quarter from a trading-activity perspective, albeit "considerably less active" than the second quarter. 

While July was particularly slow, activity picked up in August and further in September, Worthington said.

Last week Coinbase said that Facebook  (FB) - Get Facebook, Inc. Class A Report has chosen it as the custody partner for Novi. That's a new digital wallet that the social media giant says will enable users to convert local currencies into crypto via a stand-alone app that plugs into other Facebook products such as Instagram.

Earlier this month, Coinbase said that it would be making its own NFT marketplace native to the exchange. 

The company says that NFTs play an important role in its mission to "increase economic freedom in the world."