Coinbase Global (COIN 5.68%) stock has been riding the recent crypto wave higher. Shares of the cryptocurrency exchange platform have rocketed higher by more than 70% over the past month. That coincides with a surge in value within the digital assets market, including a nearly 50% rise in the price of Bitcoin.
Coinbase is considered a beneficiary as more investors seek to hold the leading cryptocurrency in their portfolio. That's the environment that led JMP Securities analyst Devin Ryan on Wednesday to boost his target price for Coinbase stock from $220 to $300 per share. That would represent a gain of roughly 20% from Coinbase stock's Wednesday closing price.
Bitcoin ETFs add to the excitement
The recent approval from the Securities and Exchange Commission (SEC) for spot Bitcoin exchange-traded funds (ETFs) has opened an avenue for investors to easily add Bitcoin to their portfolios. And it also has opened up the possibility for Coinbase to be the custodian for more Bitcoin clients, according to Ryan. The analyst sees capital inflows to the Bitcoin ETFs of more than $200 billion over the next three years.
Coinbase is also working to position itself for the potential boost to its business. The company just announced plans to raise money through the issuance of over $1 billion worth of convertible senior notes. Coinbase says those funds will be used to pay down more expensive debt as well as for working capital and capital expenditures.
This move to shore up its finances and prepare for future growth is another reason the analyst thinks there's room for another 20% rise in Coinbase stock. Whether that will come about also depends on the fate of Bitcoin and the cryptocurrency markets themselves. With the momentum that Bitcoin has recently gained, it's likely that more investors will look to diversify with crypto. That makes Ryan's price target look very achievable.
