Investing.com – Bullish sentiment is growing across the cryptocurrency ecosystem, as highlighted by last Thursday’s State of Crypto Summit in New York, hosted by Coinbase (NASDAQ:).
According to HC Wainwright, the event included panel discussions with executives from Coinbase, BlackRock (NYSE:), ARK Invest and others, covering key topics such as spot BTC ETFs, payments and stablecoins, real-world asset tokenization, and political issues and environment regulatory in the US and abroad.
Institutional interest in cryptocurrencies is growing, but adoption is still in its early stages. The approval and launch of spot BTC ETFs in the U.S. in January was the catalyst for a massive rally in prices and other digital assets this year.
Meanwhile, HC Wainwright sees three short-term positive catalysts for the crypto industry: the approval of spot BTC ETFs by gigantic broker-dealers and investment advisory platforms, greater regulatory clarity in the US, and the introduction of spot ETH ETFs. “Institutional interest is certainly growing, but we are still at the beginning of implementation,” noted HC Wainwright.
US spot BTC ETFs have attracted over $15 billion in total net inflows in just five months and currently have $63.5 billion in total assets under management (AUM). Coinbase serves as the custodian for approximately 90% of U.S. spot ETF assets. According to Samara Cohen, chief investment officer of ETF and Index Investing at BlackRock, “80% of total inflows to date have come from retail investors.”
Most gigantic broker-dealer and investment advisory platforms in the U.S. still undergo due diligence processes before approving these products for client portfolios. There are approximately 15,000 registered investment advisors (RIAs) in the U.S. who manage $114 trillion in assets for their clients. Even a miniature portfolio allocation from this expansive pool of wealth could impact an asset class with a combined market capitalization of $2.4 trillion.
HC Wainwright further details that stablecoins have settled a total volume of $10 trillion, exceeding the total transaction volume of Mastercard (NYSE:), the world’s second largest payment network. According to BlackRock, “56% of Fortune 500 companies are actively working on blockchain-based projects.” BlackRock has also tokenized real-world assets on the blockchain and currently has the largest tokenized treasury fund, BlackRock USD Institutional Digital Liquidity Fund (BUIDL), with $382 million in AUM. Boston Consulting Group (BCG) data projects with tokenized assets will reach $16 trillion by 2030, up from $310 billion in 2022.
HC Wainwright reiterated his Buy rating and $315 price target on Coinbase, which reflects an EV/revenue multiple of 12.5x on 2024 total revenue estimates of $6.3 billion. Threats to this bullish stance include concentration of retail revenues, volatility in the value of crypto assets, a vigorous regulatory environment, and intense competition.
