JPMorgan Anticipates Challenges for Crypto Market, Downgrades Coinbase Stock

JPMorgan, a global investment bank, has downgraded Coinbase stock while warning of a challenging period ahead for the crypto market. With a focus on the current pressure on crypto prices, JPMorgan cautions that there is a "greater potential for cryptocurrency ETF enthusiasm to further deflate." This could result in lower crypto prices and reduced trading volume.

JPMorgan's Outlook on the Crypto Market and Coinbase's Downgrade

On Monday, JPMorgan downgraded Coinbase Global (Nasdaq: COIN) from Neutral to Underweight, setting a price target of $80. Currently, Coinbase is trading at $123.43, marking a 28% decline in the past month. JPMorgan analyst Kenneth Worthington explained the downgrade in a note, stating:

While we recognize Coinbase as the dominant U.S. exchange in the crypto ecosystem and a global leader in cryptocurrency trading and investing, we believe that the catalyst of bitcoin ETFs, which has brought the ecosystem out of its winter period, will disappoint market participants.

Worthington noted that the stock's value, based on normalized earnings power, is estimated at $80 per share, indicating a potential downside of 35%. Despite acknowledging Coinbase's progress in areas like its derivatives platform and L2 network, Worthington highlights the threat posed by the declining crypto market cap since the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) on January 10.

The analyst further explains that although it's only been a week since the launch of spot bitcoin ETFs, the initial net inflow into these funds appears to be less than what was anticipated by the cryptocurrency community and the financial media. It is also lower than the inflow witnessed during the first week of flows into the Gold ETF in 2004. Worthington adds, "We believe that the crypto-industry set excessively high expectations for the ETF launches, which, while significant, are simply too high and unrealistic."

Worthington goes on to state:

Cryptocurrency prices are already under pressure… We anticipate a greater potential for cryptocurrency ETF enthusiasm to deflate further, resulting in lower token prices, reduced trading volume, and diminished ancillary revenue opportunities for firms like Coinbase.

Last week, another JPMorgan analyst warned of an impending bitcoin selloff, predicting a $3 billion outflow from Grayscale. Grayscale converted its bitcoin trust (GBTC) into a spot ETF following the SEC's approval of spot bitcoin ETFs on January 10. However, this conversion has been followed by substantial outflows for Grayscale. In contrast, several newly launched spot bitcoin ETFs, particularly Blackrock's Ishares Bitcoin Trust (IBIT), have experienced significant inflows.

What are your thoughts on JPMorgan's perspective regarding the crypto market, spot bitcoin ETFs, and Coinbase? Share your opinions in the comments section below.

Frequently Asked Questions

How much of your portfolio should you hold in precious metals

To answer this question we need to first define precious metals. Precious metals have elements with an extremely high worth relative to other commodity. They are therefore very attractive for investment and trading. Today, gold is the most commonly traded precious metal.

There are however many other types, including silver, and platinum. The price volatility of gold can be unpredictable, but it is generally stable during periods of economic turmoil. It is also unaffected significantly by inflation and Deflation.

The general trend is for precious metals to increase in price with the overall market. That said, they do not always move in lockstep with each other. When the economy is in trouble, for example, gold prices tend to rise while other precious metals fall. Investors expect lower interest rate, making bonds less appealing investments.

However, when an economy is strong, the reverse effect occurs. Investors are more inclined to invest in safe assets, such as Treasury Bonds, and they will not demand precious metals. These precious metals are rare and become more costly.

You must therefore diversify your investments in precious metals to reap the maximum profits. Additionally, since the prices of precious metals tend to rise and fall together, it's best to invest in several different types of precious metals rather than just focusing on one type.

How much gold do you need in your portfolio?

The amount of capital that you require will determine how much money you can make. Start small with $5k-10k. As you grow, it is possible to rent desks or office space. This will allow you to pay rent monthly, and not worry about it all at once. It's only one monthly payment.

You also need to consider what type of business you will run. In my case, I am running a website creation company, so we charge clients around $1000-2000/month depending on what they order. This is why you should consider what you expect from each client if you're doing this kind of thing.

You won't get a monthly paycheck if you work freelance. This is because freelancers are paid. So you might only get paid once every 6 months or so.

You need to determine what kind or income you want before you decide how much of it you will need.

I recommend starting with $1k-$2k in gold and working my way up.

How much is gold taxed under a Roth IRA

An investment account's tax is calculated based on the current value of the account, and not on what you paid originally. All gains, even if you have invested $1,000 in a mutual funds stock, are subject to tax.

You don't pay tax if you have the money in a traditional IRA/401k. Dividends and capital gains are exempt from tax. Capital gains only apply to investments more than one years old.

The rules governing these accounts vary by state. Maryland requires that you withdraw funds within 60 business days after reaching the age of 59 1/2. You can delay until April 1st in Massachusetts. New York offers a waiting period of up to 70 1/2 years. To avoid penalties, plan ahead so you can take distributions at the right time.


  • If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (
  • You can only purchase gold bars at least 99.5% purity. (
  • If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (
  • This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (
  • (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (

External Links

How To

The best place to buy silver or gold online

You must first understand the workings of gold before you can purchase it. Gold is a precious metallic similar to Platinum. It's very rare and is used as money because of its durability and resistance to corrosion. It is very difficult to use and most people prefer to purchase jewelry made of it over actual bars of Gold.

Two types of gold coins are available today: the legal tender type and the bullion type. The legal tender coins are issued for circulation in a country. They usually have denominations such as $1, $5, $10, and so on.

Bullion coins are only minted to be used for investment purposes. Their value increases over time because of inflation.

They aren’t exchangeable in any currency exchange. If a person purchases $100 worth of gold, 100 grams of the gold will be given to him/her. The $100 value is $100. Every dollar spent on gold purchases, the buyer receives one gram of gold.

When you are looking to purchase gold, the next thing to know is where to get it. If you want to purchase gold directly from a dealer, then a few options are available. You can start by visiting your local coin shop. You can also go to a reputable website such as eBay. You can also look into buying gold online from private sellers.

Private sellers are individuals who offer gold for sale, either at wholesale prices or retail prices. Private sellers charge a 10% to 15% commission per transaction. A private seller will usually return less money than a coin shop and eBay. This option is often a great one for investors in gold, as it gives you greater control over the item's value.

The other option is to purchase physical gold. While physical gold is easier than paper certificates to store, you still need to make sure it is safe. Physical gold should be stored in an impenetrable container, such a vault and safety deposit box to ensure its safety.

To purchase gold by yourself, you can visit a bank and a pawnshop. A bank will be able to provide you with a loan for the amount of money you want to invest in gold. The pawnshop is a small business that allows customers to borrow money to buy items. Banks usually charge higher interest rates that pawn shops.

A third way to buy gold? Simply ask someone else! Selling gold is simple too. Set up a simple account with and you will start receiving payments instantly.

By: Kevin Helms
Title: JPMorgan Anticipates Challenges for Crypto Market, Downgrades Coinbase Stock
Sourced From:
Published Date: Tue, 23 Jan 2024 21:00:19 +0000

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