Shares of Coinbase Global (NASDAQ:COIN) tumbled at the time of writing after Piper Sandler downgraded the stock from Buy to Hold due to its dramatic year-to-date rally and the cloud of “uncertainty” overshadowing it. This uncertainty stems partially from legal issues the cryptocurrency exchange faces. Analyst Patrick Moley expressed concern over the unclear regulatory climate in the U.S. and the Securities and Exchange Commission’s (SEC) recent case against Coinbase, which he believes creates too much ambiguity to accurately predict future revenues.
Coinbase has seen a 138% rise since the start of the year, fueled by soaring crypto prices and Wall Street’s renewed interest. However, Moley pointed out that these climbing prices haven’t resulted in higher trading volumes for Coinbase in recent quarters. He anticipates Q2 to reflect the lowest quarterly trading volumes and monthly transacting user totals in over two years. Despite all this, Moley still sees Coinbase as a major player in the crypto space once regulatory clarity is achieved in the U.S. However, he wants to see progress on the regulatory front and an improvement in the company’s fundamentals before taking a more positive stance on Coinbase.
Is COIN a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on COIN stock based on seven Buys, seven Holds, and six Sells assigned in the past three months, as indicated by the graphic above. Nevertheless, the average price target of $57.71 per share implies 26.33% downside risk.
