MicroStrategy better than Coinbase for crypto exposure: Berenberg

Berenberg analysts sees upside in MicroStrategy to $340.
They explain their bullish view in a recent research note.
Coinbase stock has a “hold” rating only at Berenberg.

MicroStrategy Inc is a better pick for exposure to cryptocurrencies than Coinbase Global Inc, as per the Berenberg analysts.

MicroStrategy stock has upside to $340

Mark Palmer and Hassan Saleem see upside in the technology company to $340 a share – up another 20% from here. In a recent research note, they said:

MicroStrategy which features a unique business model focused on the acquisition and holding of bitcoins, represents an attractive alternative to Coinbase in the current environment.

At writing, the Nasdaq-listed firm owns about 140,000 BTC in total. Earlier in May, MicroStrategy said it took an impairment charge of $170 million on its bitcoin holdings in the first quarter.

Its stock price has already nearly doubled since the start of the year.

Why is Berenberg dovish on Coinbase stock?

On Coinbase, Berenberg analysts have a “hold” rating with a price objective of $55 a share – roughly in line with where it’s currently trading.

They’re dovish primarily due to the ongoing regulatory scrutiny. In March, the crypto exchange received a “Wells Notice” from the U.S. Securities and Exchange Commission (SEC).

Coinbase’s revenue is at risk in the event of an enforcement action are disproportionately profitable relative to its total revenue.

In comparison, MicroStrategy focuses on bitcoin that’s already been classified as a commodity and not a security thereby insulating it from such risks. The correlation between MSTR and COIN currently stands at about 0.96.