- Coinbase trading volumes projected to reach $435 billion in Q4 2024, up 137% from Q3.
- Needham & Co. raises Coinbase price target to $420 from $375, maintaining buy rating.
- Bitcoin‘s market dominance drops to 51% from 59%, indicating increased altcoin activity.
- December 2024 on track to be Coinbase’s best trading month since May 2021.
- Analyst warns declining Bitcoin dominance could signal market euphoria preceding potential downturn.
Coinbase (COIN) is experiencing a substantial revival in retail trading activity, driven by Bitcoin’s recent surge past $100,000 and growing interest in alternative cryptocurrencies, according to Needham & Co. analyst John Todaro.
The cryptocurrency exchange’s trading volumes are projected to reach $435 billion in Q4 2024, marking a 137% increase from the previous quarter’s $183 billion. This surge follows a period of declining activity, when unfavorable economic conditions and subdued Bitcoin prices below $73,800 contributed to an 18% drop in Q3 trading volumes.
Altcoin Momentum
The ratio of Bitcoin’s market capitalization to the total cryptocurrency market value has declined from 59% to 51%, according to CoinGecko data. This shift indicates increasing retail trader participation in alternative cryptocurrencies, though Todaro cautions this could signal market euphoria often preceding corrections.
Coinbase’s revenue structure remains heavily dependent on transaction fees, with Q3 2024 showing:
- Transaction revenue: $572 million
- Subscription and services revenue: $556 million
Market Volatility Impact
The Bitcoin Volatility Index reached 2.44% in November, below the year’s peak of 3.25% in August. CFO Alesia Haas noted in the company’s earnings call: "Trading is correlated very much with volatility. Crypto asset volatility came down in Q3 as compared to Q2, and so we did see a little bit of that volume shift."
The exchange has expanded its asset listings, particularly in the meme coin category, adding tokens like Gigachad (GIGA), Turbo (TURBO), Mog Coin (MOG), and Moodeng (MOODENG) to its roster of 267 digital assets.
Coinbase shares have doubled year-to-date, trading at $310.52. The stock received additional support from Oppenheimer analyst Owen Lau, who increased his price target to $358, citing anticipated regulatory clarity and sustained trading volumes under the new administration.
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