Goldman Cuts Coinbase to ‘Sell’ Due to Fall in Crypto Prices and Industry Activity; Shares Drop

The company faces a difficult choice between shareholder dilution and effective employee compensation, the report said.

AccessTimeIconJun 27, 2022 at 12:48 p.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

Goldman Sachs (GS) cut Coinbase’s (COIN) rating to “sell” from “neutral” and slashed its price target to $45 from $70, the bank said in a report on Monday.

  • The downgrade was due to the continued fall in crypto prices and the ensuing fall in industry activity levels, Goldman said. Coinbase shares dropped 5.7% to $59.40 in pre-market trading.
  • In the same report, the Wall Street giant upgraded Robinhood Markets (HOOD) to “neutral” from “sell” with a $9.50 price target. Robinhood shares rose 2.6% to $8.21 in pre-market trading.
  • Current digital asset levels and trading volumes imply “further degradation” in Coinbase’s revenue base, which Goldman sees falling around 61% year-on-year in 2022, and about 73% in the back half of the year.
  • While Coinbase, which is helmed by CEO Brian Armstrong, recently announced a notable restructuring, which involved laying off 18% of its workforce, the bank says further cuts are needed.
  • Coinbase will need to make substantial reductions to its cost base to “stem the resulting cash burn” as retail trading activity slows down, the note said, adding that the company faces a difficult choice between shareholder dilution and significant reductions in “effective employee compensation,” which may have a negative impact on talent retention.
  • Goldman is more bearish on the competitive environment and the outlook for fee rate compression given the announced merging of Coinbase and Coinbase Pro platforms, which has the potential to reduce the switching costs and make lower pricing more available to users.
  • With Coinbase trading with a market cap of around $11.5 billion relative to its almost $3.8 billion net cash position as of the first quarter 2022, the bank sees limited valuation support as higher revenues in the short term would require higher cryptocurrency prices and volatility, and it forecasts breakeven to negative adjusted EBITDA over the next several years.


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.