Analyst Downgrades Coinbase Stock Due to Uncertainties

Analysts Downgrade Coinbase Ratings and Expect Trading Volume to Hit Two-Year Low

Piper Sandler downgrades Coinbase stock from overweight to neutral, predicting a 20% fall from the current price.
Analysts express concern about Coinbase's future revenues due to the US's strict crypto crackdown and SEC lawsuit.
Coinbase's second-quarter trading volumes are expected to be the lowest in the last two years, despite crypto rally.

The renowned investment bank Piper Sandler has rated Coinbase stock (COIN) neutral from overweight as it expects second-quarter trading volume to be the lowest in the past two years.

While Coinbase stock has been rallying post the BlackRock Exchange-Traded Fund (ETF) filings, several analysts are concerned about its future revenue.

Piper Sandler Downgrades Coinbase Stock Ratings

Piper Sandler downgraded Coinbase’s rating from overweight to neutral and predicted a fall of over 20% from the current market price. As of writing, the stock trades at around $77, while the investment bank’s latest price target is $60.

Piper Sandler’s analyst Patrick Moley argues that the uncertainty around Coinbase makes it difficult to forecast future revenue. This is because the United States, one of the largest markets for Coinbase, has been under a strict crypto crackdown this year.

Moreover, the Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, accusing it of acting as an unregistered broker.

Lowest Trading Volume in Two Years?

In 2023, the flagship cryptocurrency Bitcoin has rallied by over 80%. Simultaneously Coinbase stock is up by over 140%. The spot Bitcoin ETF filings by large asset managers such as BlackRock have catalyzed the rally.

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But Moley is concerned about the exchange’s trading volume. He explains:

“Rising crypto prices have not translated to increased trading volumes for Coinbase in recent quarters and the timing of a spot Bitcoin ETF approval is anyone’s guess.”

That said, Moley expects Coinbase’s second-quarter trading volumes to be the lowest in the last two years. Last week, BeInCrypto reported that Berenberg Capital predicted a 50% drop in Coinbase stock to around $39 due to various factors, including regulatory uncertainty.

COIN is approaching major resistance at around $85. The chart below shows that the price-action of COIN has mostly been sideways from $85 to $50 in 2023.

Chart of Coinbase Global, Inc. in the daily timeframe. Source: TradingView

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For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.