Coinbase’s NFT Strategy Questioned by Mizuho Analyst

Dan Dolev is skeptical about the exchange getting into the NFT business at this time, citing a decline in NFT internet searches.

AccessTimeIconApr 5, 2022 at 3:31 p.m. UTC
Updated May 11, 2023 at 5:58 p.m. UTC

Crypto exchange Coinbase’s (COIN) plan to launch an non-fungible token (NFT) marketplace this year is drawing some skepticism from Mizuho, which says interest in NFTs “appears to be dwindling.”

In a note to clients, Mizuho analyst Dan Dolev cited an analysis of internet searches showing hype around NFTs has slowed. Dolev estimates that Coinbase may spend up to $300 million this year on its NFT business while overall company profitability could see headwinds, along with higher operating expenses.

“In a year in which profitability may be challenged, we question the strategic rationale of chasing NFTs, especially as interest in NFTs appears to be dwindling,” Dolev wrote.

Dolev lowered his revenue estimates for Coinbase, citing lower-than-expected Q1 volume and medium-term pressure on average transaction revenue per user owing to the new NFT marketplace. The investment bank maintained a neutral recommendation on Coinbase, but lowered its price target to $190 from $220.

Despite Mizuho’s bearish outlook on Coinbase’s NFT segment, others on Wall Street are expecting strong revenue gains from it. Needham estimated that, in a bullish case, Coinbase could see an additional $1.26 billion in revenue through its NFT business. In January, Goldman Sachs said Coinbase was still the “blue-chip way” for investors to gain crypto exposure.

Shares of Coinbase were down 5.6% to $180.90 on Tuesday, while the price of bitcoin was up slightly over the last 24 hours.


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Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.

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