- Piper Sandler downgraded Coinbase Global Inc on Wednesday.
- Analyst Patrick Moley cited regulatory uncertainty for a dovish view.
- Coinbase stock is up nearly 60% over the past thirty days.
Coinbase Global Inc has been an absolute delight for shareholders over the past thirty days but a sharp decline is likely to move forward, according to a Piper Sandler analyst.
Avoid Coinbase stock due to regulatory uncertainty
On Wednesday, Patrick Moley downgraded the crypto exchange to “neutral” and also lowered his price target to $60, signaling a 25% downside from here.
The analyst became a dove mainly because the US Securities and Exchange Commission sued the Nasdaq-listed company last month for operating as an unregistered exchange (read more).
In a research note today, he attributed the recent rise in Coinbase shares to prominent asset managers filing for a Spot Bitcoin ETF and the resulting upside for crypto prices but said:
Rising crypto prices have not translated into increased trading volumes for COIN in recent quarters and the timing of a Spot Bitcoin ETF approval is anyone’s guess.
Coinbase Global will report a weak second quarter
Moley expects the crypto firm to report monthly transaction user and trading volumes at two-year lows in its second financial quarter.
The Piper Sandler analyst agreed that Coinbase Global will eventually emerge as a major player in the crypto space but said:
We would like to see more progress on the regulatory front and a convincing turnaround in the underlying fundamentals of the business before we become more bullish on Coinbase stock.
Despite the regulatory crackdown, Coinbase increased its market share last month to a new high since January 2023, according to data from Kaiko – a digital asset data provider.