In what's been a very downbeat week for cryptocurrencies generally, shares of Coinbase (COIN 2.31%) were holding up rather well. In late trading on Friday, the crypto exchange operator's stock was down by 0.7%, only slightly more than the S&P 500 index and notably above to the 3% slide of Bitcoin, for example, or Ethereum's 6% decline.
Cryptocurrency and related assets are hardly any investor's top choice right now. The Federal Reserve has signaled that it will raise key interest rates this year and withdraw from bond-buying, a move that for various reasons should negatively affect cryptocurrency investments.
As it's effectively a crypto marketplace, Coinbase will generally ride along with these waves.
On Friday, though, the company benefited from a positive mention from an influential name in the traditional finance sector. JPMorgan Chase published a new report that took a bullish stance on cryptocurrencies, with analyst Kenneth Worthington writing that such assets should become more critical to the operations of the finance sector.
In his view, the use cases for cryptocurrencies are only at their infancy and will grow much larger in a short space of time. In particular, decentralized finance (DeFi) has excellent potential starting this year, although in 2021 it was somewhat of a damp squib.
Worthington singled out Coinbase as a particularly attractive investment in the cryptosphere. He wrote: "[T]he use cases for the cryptomarkets will continue to grow and new projects and tokens with more and different use cases will surface. With these projects attached to tokens and Coinbase a leading exchange to buy and sell tokens, we see Coinbase as a leading direct beneficiary of cryptomarket growth."