Shares of Coinbase (NASDAQ:COIN) plunged today after CEO Brian Armstrong warned of rumors that the SEC might ban crypto staking for U.S. retail investors. Staking allows holders of cryptocurrencies to earn an income from their investments. This is likely to impact Ethereum’s token Ether (ETH-USD) if these rumors become a reality, along with Coinbase itself. Indeed, Coinbase collects a 25% fee from customers who stake their coins.
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This is particularly concerning because staking revenue is a high-margin segment that allows the company to diversify. This is particularly useful during crypto winters, where transaction volumes fall, which ultimately leads to lower commission revenue.
Despite today’s plunge, Wall Street still sees more downside ahead. With a consensus price target of $50.94 on COIN stock, analysts think it can fall 17% lower.
