Investing.com -- Bullish sentiment is building across the crypto ecosystem, highlighted by last Thursday's State of Crypto Summit in New York City, hosted by Coinbase (NASDAQ:COIN).
According to H.C. Wainwright, the event featured panel discussions with executives from Coinbase, BlackRock (NYSE:BLK), ARK Invest, and others, covering key topics such as spot BTC ETFs, payments and stablecoins, tokenization of real-world assets, and the political and regulatory environment in the U.S. and abroad.
Institutional interest in crypto is on the rise, but adoption is still in the early stages. The approval and launch of spot BTC ETFs in the U.S. in January catalyzed a massive price rally for Bitcoin and other digital assets this year.
Meanwhile, H.C. Wainwright sees three near-term positive catalysts for the crypto industry: the approval of spot BTC ETFs by large broker-dealers and investment advisory platforms, greater regulatory clarity in the U.S., and the launch of spot ETH ETFs. "Institutional interest is certainly on the rise, but we are still in the early days of adoption," H.C. Wainwright noted.
The U.S. spot BTC ETFs have collectively attracted over $15 billion in net inflows in just five months and now manage $63.5 billion in total assets under management (AUM). Coinbase serves as the custodian for about 90% of these U.S. spot ETF assets. According to Samara Cohen, Chief Investment Officer of ETF and Index Investments at BlackRock, "80% of the total inflows to date have come from retail investors."
Most large broker-dealer and investment advisory platforms in the U.S. are still undergoing due diligence processes before approving these products for client portfolios. There are roughly 15,000 Registered Investment Advisors (RIAs) in the U.S. managing a combined $114 trillion of wealth for their clients. Even a small portfolio allocation from this massive pool of wealth could impact an asset class with a combined market cap of $2.4 trillion.
H.C. Wainwright further details that stablecoins settled $10 trillion in total volume, exceeding the total transaction volume of Mastercard (NYSE:MA), the world's second-largest payment network. According to BlackRock, "56% of Fortune 500 companies are actively working on projects on the blockchain." BlackRock has also tokenized real-world assets on the Ethereum blockchain and now has the largest tokenized treasury fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), with $382 million in AUM. Boston Consulting Group (BCG) data projects that tokenized assets will reach $16 trillion by 2030, up from $310 billion in 2022.
H.C. Wainwright reiterated its Buy rating and $315 price target for Coinbase, reflecting a 12.5x EV/revenue multiple on the 2024 total revenue estimate of $6.3 billion. Risks to this bullish stance include retail trading revenue concentration, volatility in crypto asset values, a dynamic regulatory environment, and intense competition.