Analyst Downgrade Casts Shadow Over Coinbase Outlook

A prominent Wall Street research firm has adopted a decidedly bearish stance on Coinbase Global, Inc., slashing its price target and reiterating a sell recommendation. Compass Point Research & Trading significantly reduced its target for the cryptocurrency exchange’s shares to $140, down from a previous estimate of $190.

Trading Volumes and Competitive Pressures Drive Pessimism

The downgrade follows the company’s latest quarterly earnings report, which revealed a net loss of $667 million. Analysts at Compass Point point to a marked decline in user trading activity across both spot and derivative markets since those results were published. They argue that current market expectations for Coinbase’s performance this year appear overly optimistic.

The firm’s analysis highlights a concerning historical pattern: during past “crypto winters,” retail investor participation has typically retreated. There is a growing concern that trading volumes could approach historically low levels. Compass Point strategists also note an intensified competitive landscape, a shift from previous market cycles. Established fintech companies and electronic brokers are making deeper inroads, presenting Coinbase with more direct rivalry than it has faced before.

Should investors sell immediately? Or is it worth buying Coinbase?

In their view, these structural challenges and market headwinds outweigh any potential for short-term recovery, justifying the maintained sell rating.

Diverging Views in the Analyst Community

While Compass Point’s skepticism is shared by some peers, the overall analyst picture for Coinbase remains mixed. Following the quarterly report, other firms including Piper Sandler and Needham also adjusted their price targets downward.

However, a consensus compiled by MarketBeat suggests a more moderate outlook. The aggregate rating currently stands at “Moderate Buy.” This rating is supported by recommendations from 19 analysts advocating a buy position, contrasted with 12 advising holders to maintain their positions and two recommending selling. The spectrum of opinion reflects varying interpretations of the impact of weak trading volumes, ranging from cautious optimism to pronounced doubt about the company’s near-term trajectory.