Bitcoin
$61,478.13-3.18%
Ethereum
$2,997.83-2.87%
Binance Coin
$545.15-0.60%
Solana
$130.18-6.68%
XRP
$0.48877088-1.88%
Toncoin
$5.99-6.45%
Dogecoin
$0.14413141-9.02%
Cardano
$0.44272094-3.51%
Shiba Inu
$0.00002178-3.38%
Avalanche
$33.85-3.53%
Tron
$0.10986654-2.97%
Bitcoin Cash
$478.46+0.59%
PlayIconNav
Crypto Prices CoinDesk 20 Index CoinDesk 20 Index
Consensus 2024Price Increase Extension Ends In
02
DAYS
10
HR
17
MIN
50
SEC
Finance

Mizuho Cuts Crypto Exchange Coinbase to Underperform, Trims Price Target

The bank’s analysis shows that 2023 revenue estimates for the crypto exchange are overly optimistic.

By Will Canny
AccessTimeIconDec 9, 2022 at 1:51 p.m. UTC
Updated May 9, 2023 at 4:04 a.m. UTC
VolumeMuteUnmute
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Mizuho cut its rating on crypto exchange Coinbase's shares on Friday to underperform from neutral and lowered its price target to $30 from $42, saying it expects depressed crypto trading volume in 2023 and 2024 to result in lower revenue for the exchange.

The stock fell 2.8% to $41.60 in premarket trading.

In a research report, Mizuho also said that interest income from Circle’s USD coin (USDC) has become increasingly important for Coinbase, accounting for 10%-15% of third-quarter revenue, amid deteriorating sentiment and trading volumes.

Any potential changes to Coinbase’s USDC income from Circle could have an “amplified adverse effect on its profitability,” the report said.

Coinbase, which is a co-founder of USDC, on Friday waived off conversion fees for users who wish to switch to USDC from Tether's USDT.

Irrespective of interest income risks, the bank’s analysis shows that 2023 revenue estimates are likely overly optimistic.

Coinbase CEO Brian Armstrong said on Wednesday that the company’s revenue will be half or less what it was last year as the exchange struggles amid sharp drops in cryptocurrency prices and continuing ripple effects from multiple bankruptcies this year, including the recent collapse of rival exchange FTX.

The company's shares have fallen over 80% this year, and the stock has been one of the worst performers on the Nasdaq index.

Read more: Crypto Exchange Coinbase Asks Users to Switch USDT for USDC

Disclosure

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 Block.one; 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

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 consensus.coindesk.com to register and buy your pass now.