Coinbase Global (NASDAQ:COIN) stock advanced 8.1% in Thursday premarket trading after J.P. Morgan upgraded the cryptocurrency exchange to Neutral from Underweight to reflect the surge in crypto prices over the last three months.

Bitcoin (BTC-USD), the largest market cap crypto, has jumped 38% since Nov. 14. In Thursday trading, BTC is trading up 1.5% at ~$52.4K.

Analyst Kenneth Worthington had been concerned that market enthusiasm for crypto would deflate after the launch of bitcoin ETFs in January. "However, what was initially a sell-the-news event with the launch of U.S. bitcoin spot ETFs, has now turned into meaningful bitcoin price appreciation," he wrote in a note to clients.

The analyst figures that bitcoin appreciation is increasing spot bitcoin ETF flows, which is propelling bitcoin prices higher, and spreading to other tokens as well.

"Given the acceleration in recent days of flows into bitcoin ETFs and the significant price appreciation of bitcoin and now ethereum, we are returning to a Neutral rating on Coinbase (COIN) as we see the higher cryptocurrency prices not only sustaining, but improving, activity levels and Coinbase's earnings power as we look to 1Q24," Worthington noted.

The Neutral rating aligns with the SA Quant rating, the average SA Analyst rating, and the average Wall Street rating.