Summary:

Piper Sandler downgraded Coinbase, stating that there is too much uncertainty surrounding the company. The Securities and Exchange Commission (SEC) recently filed a lawsuit against Coinbase, accusing it of operating as an unregistered broker and exchange. Additionally, the lack of regulatory clarity contributed to the downgrade. Analyst Patrick Moley lowered his price target to $60 from $65, which implies a 24.9% drawdown from Monday’s close. Despite Coinbase’s impressive year-to-date stock performance, Moley attributes it to rising crypto prices and asset managers filing for spot Bitcoin ETFs, rather than increased trading volumes for Coinbase. Moley anticipates that Coinbase will report its lowest quarterly trading volumes and monthly transacting user totals in over two years for the second quarter. Pre-market trading shows shares down over 2.7% on Wednesday.

Details:

Moley believes that Coinbase has the potential to be a major player in the crypto space once regulatory clarity is achieved in the US. However, he emphasizes the need for progress on the regulatory front and a turnaround in the underlying fundamentals of the business before becoming more positive on Coinbase.

Source:

AsumeTech’s Michael Bloom contributed to this report.