In a recent note, J.P. Morgan analyst Kenneth Worthington expressed skepticism regarding the true impact of Coinbase's involvement in the U.S. spot Bitcoin exchange-traded funds (ETFs). Worthington criticized the lack of clarity surrounding Coinbase's role, particularly in providing custodial services for eight out of the ten bitcoin ETFs.

The analyst highlighted that despite management's claims of the ETFs being a net positive, more information is needed to assess the true earnings impact. Worthington noted the media attention and market anticipation surrounding Bitcoin ETFs, and expressed disappointment that Coinbase did not provide sufficient insight into the economic arrangements with issuers. This lack of detail leaves him unsure of the monetization impact and whether it can outweigh potential volume loss in spot markets.

Interestingly, even as Coinbase exceeded Wall Street's fourth-quarter estimates, Worthington's skepticism remains. The positive earnings report resulted in a surge in the company's share price, and some analysts raised their price targets and upgraded their rating on the stock. However, Worthington, who initially had a bearish outlook due to the ETF catalyst, only upgraded the stock just before the earnings release and maintains his neutral rating. His 12-month price target for the stock stands at $95, among the lowest on Wall Street.

Analysts had previously warned that the low trading fees of ETFs could divert investors away from exchanges like Coinbase and towards these newly approved funds accessible through brokers. Worthington stated that Coinbase does not seem to think ETFs are causing an investor shift, quoting the company's assertion that all trading has remained additive to existing spot trading.

CoinDesk, a renowned cryptocurrency news outlet, reported on the developments. The news organization, acquired by Bullish Group, a regulated institutional digital assets exchange, maintains its commitment to journalistic integrity under the guidance of a newly formed editorial committee.

As Coinbase navigates the landscape of Bitcoin ETFs and continues to report strong earnings, the skepticism from J.P. Morgan's analyst underscores the need for further transparency and analysis of the potential impacts on the company's earnings and market dynamics.