An analyst from Piper Sandler downgraded the stock of crypto exchange Coinbase earlier today.
The analyst cited uncertainty in the crypto market and the ongoing legal battle with the United States SEC.
Coinbase’s share price fell by more than 4% following the projection from Piper Sandler’s analyst.
The analyst expects the trading volumes for Q2’23 to be the lowest in two years.
An analyst from the U.S.-based investment bank Piper Sandler downgraded the country’s largest crypto exchange. Analyst Patrick Moley circulated a note earlier today wherein he shared a grim outlook for Coinbase’s stock, leading to a considerable decrease in the share price. The downgrade came just a week after German banking giant Berenberg warned that the stock’s recent rally could be short-lived.
Coinbase Stock Down 4.7%
According to a report by Bloomberg, Piper Sandler’s Patrick Moley cited Coinbase’s ongoing legal trouble with the U.S. Securities and Exchange Commission (SEC) for his latest projections. Moley also highlighted the continued lack of regulatory clarity in the United States, which according to him has created too much uncertainty in the cryptocurrency market to prudently project revenues in the coming years.
In the note shared earlier today, the Piper Sandler analyst downgraded his Coinbase recommendation from overweight to neutral. According to him, the trading volumes and the monthly transacting user totals for the second quarter of 2023 will be the lowest in over two years. Moley cut the price target of the stock from $65 to $60. The crypto exchange’s share price fell over 4% following the news. However, at the time of writing, the stock had slightly recovered and was trading at $78.
The bearish projection from Piper Sandler came after the crypto exchange’s stock gained more than 50% over the past 30%. Much of the rally was triggered by applications for spot Bitcoin exchange-traded funds (ETF) from traditional finance giants, including BlackRock and Fidelity which named Coinbase as a crypto custodian. However, Berenberg warned last week that the rally triggered by back-to-back BTC ETF applications may not last long.