Mizuho Downgraded Coinbase Stock To Underperform

Mizuho downgraded crypto exchange Coinbase’s stock to underperform from neutral on Friday.

Mizuho also stated in a research paper that interest income from Circle’s USD currency (USDC) has grown in importance for Coinbase, accounting for 10%-15% of third-quarter revenue despite declining sentiment and trading volumes.

Mizuho forecasts decreasing crypto trading activity in 2023 and 2024 to result in lower income for Coinbase, stock could fall 30% if the deal key to revenue is renegotiated, which has reduced its price target to $30 from $42.

Regardless of interest income risks, the bank’s report indicates that revenue expectations for 2023 are likely unduly optimistic.

Coinbase CEO Brian Armstrong said that the company’s revenue would be half or less of what it was last year as the exchange struggles amid sharp drops in cryptocurrency prices and the collapse of crypto exchange FTX.

According to the report, any changes to USDC revenue from Circle might have an exacerbated negative impact on Coinbase profitability.

Coinbase also waived conversion fees for users who want to switch from Tether’s USDT to USDC on Friday, eliciting a mixed reaction from the community.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Website: coincu.com

Harold

Coincu News