SEC approves Bitcoin ETFs: here’s what it means for Coinbase

Coinbase Global Inc (NASDAQ: COIN) ended 2023 with a near 400% gain but the new year may be significantly more challenging for it now that the Securities & Exchange Commission has approved the Spot Bitcoin ETFs.

Mizuho shares its view on Coinbase stock

Shares of the crypto company are up 6.0% in extended hours following the SEC news on Wednesday.

Still, analysts at Mizuho told clients in a research note today that an exchange-traded fund could eat into the volume on Coinbase Global that brought in 46% of its net revenue from transactions in its latest reported quarter.

ETFs are expected to be managing some $300 billion worth of Bitcoin or about 10% of its global supply in the coming years.

That’s part of the reason why Mizuho is super bearish on Coinbase stock.

JPMorgan analysts hold a similar opinion

Mizuho analysts currently have a price target of $54 on Coinbase Global which suggests a 65% downside from here. Their research note reads:

JPMorgan also expects the Spot Bitcoin ETFs to weigh on account growth at Coinbase as a bunch of new investors may choose an exchange-traded fund over a crypto exchange to gain exposure to BTC.

Coinbase did, however, said in a recent statement to CNBC that it will also provide services like agency trading and financing to asset managers awaiting approval for a Bitcoin ETF to make money.