Why is Coinbase (COIN) stock rising higher today?

On By Littum

Shares of cryptocurrency exchange Coinbase ( NASDAQ:COIN ) rose 5.5% in the morning session, after shares exposed to the cryptocurrency market soared as momentum improved. Notably, Bitcoin, the most popular crypto asset, is set to go past the $70,000 level, a move that could pave the way for a retest of the $73,000 high reached in March 2024. Also, with about a week to go until the US 2024 election, markets expect a potential regulatory review of the crypto space once a new administration is elected. Overall, the sentiment suggests that the markets are itching for a change.

Separately, Coinbase unveiled a new AI tool to create AI-powered agents (which could include bots for trading, portfolio management and even interacting with smart contracts) in less than three minutes. This tool was built on the Coinbase developer platform in collaboration with OpenAI – the creators of ChatGPT – and Replit, a cloud-based software development environment. The announcement highlights the growing effort to lower the adoption barrier for users interested in building AI-powered products. It also gives analysts more clarity as they assess how Coinbase can participate and benefit from the growing artificial intelligence market. After the initial pop, shares cooled to $213.27, up 4.1% from the previous close.

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Coinbase’s stock is extremely volatile and has had 76 moves greater than 5% over the past year. In that context, today’s move indicates that the market considers this news to be meaningful, but not something that would fundamentally change its perception of the company.

The previous big move we wrote about was 5 days ago when the stock fell 7.3% on news that a B. Riley analyst initiated coverage on the stock with a neutral rating and a $185 price target on valuation concerns and regulatory uncertainty. The price target implied a potential downside of 5% from where the shares were trading before the investigation began.

The analyst added: “We expect COIN stocks to remain range-bound until the election is decided and regulatory clarity is provided, or until better idiosyncratic catalysts emerge that give visibility to more consistent earnings growth.”

Coinbase is up 35.8% year-to-date, but at $213.27 a share, it still trades 23.8% below its 52-week high of $279.71 from March 2024. Investors who bought Coinbase- shares worth $1,000 at the April 2021 IPO would now be looking at an investment worth $649.17.