Coinbase Global (COIN) continues to lose market share to its global rivals and is at risk of greater losses amid the crypto bear market, Mizuho equity research analyst Dan Dolev said in a note to clients.

Dolev estimates Coinbase's average trading volume at roughly $1.2 billion in July, down from nearly $7 billion in November 2021. The company's market share of global trading volume dropped to just 2.9% in July, said Dolev, versus an average of 5.3% in the first quarter of 2022 and a peak of 8-9% in November 2021.

According to Dolev, Coinbase ranked 14th in average trading volume by dollars in July, down from fourth last November.

Binance continues to be the world's largest exchange by volume, posting an average of nearly $11 billion in trading in July, down from $32.9 billion in November 2021.

"This trend is problematic for COIN," said Dolev, as growing exchange competition will require Coinbase to continue raising marketing spend and is likely to weigh on its fee rates. "All this, coupled with subdued volume trends, is likely to weigh on profitability moving forward, in our view."

Dolev continues to rate the shares at neutral and trims his price target to $42 from $45. COIN is up modestly in Thursday action at $53.96.

Goldman Sachs downgraded its recommendation on Coinbase to a sell in late June, saying the exchange will need to make substantial reductions to its cost base to “stem the resulting cash burn” as retail trading activity slows down.