Even
though
the
launch
of
the
ten
spot
bitcoin
(BTC)
exchange-traded
funds
(ETFs)
contributed
to
Coinbase’s
better-than-expected
fourth-quarter
earnings,
analyst
at
J.P.
Morgan
is
skeptical
if
the
benefits
are
as
strong
as
the
exchange
makes
them
seem.
“Management
touted
its
involvement
in
the
U.S.
spot
Bitcoin
ETF
as
a
net
positive,
but
we’re
still
uncertain
of
its
true
earning
impact
as
we
see
both
positives
and
negatives,”
J.P.
Morgan
analyst
Kenneth
Worthington
wrote
in
a
note
on
Friday.
He
specifically
criticized
the
company’s
lack
of
clarity
around
the
business,
which
consists
of
providing
custodial
services
for
eight
of
the
ten
bitcoin
ETFs.
“Given
the
media
attention
and
market
anticipation
for
spot
Bitcoin
ETFs
especially
considering
Coinbase’s
direct
participation
and
monetization
efforts,
we
were
hoping
management
would
have
provided
more
robust
insight
into
the
economics
of
the
arrangements
with
issuers,”
the
note
said.
“Given
this
lack
of
detail,
we
remain
skeptical
as
to
the
true
monetization
impact
of
these
ETFs
and
its
ability
to
outweigh
the
potential
loss
of
volumes
in
the
spot
markets,
which
we
still
see
as
possible,”
Worthington
added.
The
criticism
comes
even
as
the
crypto
exchange
crushed
Wall
Street’s
fourth-quarter
estimates
on
Thursday,
sending
the
shares
soaring
on
Friday
and
turning
many
analysts
more
positive.
Some
analysts,
including
Wedbush
and
JMP
Securities
raised
their
price
target
on
the
stock,
while
KBW
upgraded
the
rating
to
market
perform
from
a
sell-equivalent
underperform
rating.
Analysts
had
warned
before
the
approval
of
the
ETFs
that
their
low
trading
fees
could
pull
investors
away
from
exchanges
like
Coinbase
and
into
these
newly
approved
funds
as
the
ETFs
would
be
easier
to
put
money
into
through
brokers.
However,
Worthington
noted
that
Coinbase
doesn’t
seem
to
think
ETFs
are
driving
investors
away.
“Similar
to
comments
we
heard
from
Robinhood’s
management
earlier
in
the
week,
Coinbase
alleged
that
the
spot
Bitcoin
ETF
drove
no
shift
in
client
behavior,
and
all
trading
seemed
additive
to
existent
spot
trading,”
he
wrote.
Worthington,
who
went
bearish
on
the
Coinbase
stock
on
Jan.
23,
citing
a
disappointing
ETF
catalyst,
upgraded
the
stock
right
before
the
fourth-quarter
earnings,
citing
higher
digital
asset
prices.
His
12-month
price
target
for
the
stock
is
$95,
one
of
the
lowest
among
Wall
Street
analysts
and
he
is
sticking
with
his
neutral
rating.