JPMorgan Cuts Coinbase to Neutral With $68 Price Target; Shares Slump

It will be challenging for the exchange to generate a profit in the near future, the bank’s analysts said.

AccessTimeIconJun 14, 2022 at 11:44 a.m. UTC
Updated May 11, 2023 at 5:36 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

The extreme decline in cryptocurrency markets in the second quarter of this year combined with Coinbase’s (COIN) ramp-up in investment, means it will be challenging for the exchange to generate a profit in the near term, JPMorgan said in a report Tuesday.

The bank cut its rating on the stock to neutral from overweight and slashed its price target to $68 from $171.

  • Key Events You Shouldn't Miss at Consensus 2024
    Key Events You Shouldn't Miss at Consensus 2024
  • What to Expect From Consensus 2024
    What to Expect From Consensus 2024
  • Will Solana and Altcoins Dominate the Market Next?
    Will Solana and Altcoins Dominate the Market Next?
  • What's Next for FIT21?
    What's Next for FIT21?
  • Since the company generates a large part of its revenue from the value of crypto token prices - from trading, staking and custody - and much of the rest based on sentiment, the recent downturn is likely to have a “material negative impact on Coinbase revenue,” the report says.

    JPMorgan estimates that trading volumes on Coinbase have fallen more than 30% in the second quarter of this year, following a 40% decline in the first.

    Coinbase has significantly increased the pace of investment in recent quarters, hiring 3,200 staff over the last year, with 1,200 hired in the first quarter alone, the note says. This is a huge amount of recruitment for the exchange, which now has around 5,000 employees, according to the note.

    However, Coinbase had later paused recruitment and rescinded some job offers following the recent market downturn, as reported. The hiring freeze should stop expense growth from mid-May, JPM noted.

    Coinbase may need to do more than just implement a hiring freeze and might have to reduce expense levels to keep EBITDA losses within its $500 million guidance cap for 2022, the report says.

    Against this backdrop of a more difficult macro environment, the bank notes that rival exchange FTX has overtaken Coinbase in terms of crypto activity in May and has continued to outpace Coinbase in June.

    Coinbase shares fell close to 6% in premarket trading to $49.09.

    CORRECTION (June 14, 11:56 UTC): Corrects share fall in 9th paragraph.


    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Author placeholder image

    Will Canny is CoinDesk's finance reporter.

    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.

    Read more about