New Analyst Perspective Puts Coinbase (NASDAQ:COIN) in a Tailspin

Cryptocurrency stock Coinbase (NASDAQ:COIN) took it on the chin today, down over 3.5% in Wednesday afternoon’s trading. The decline came after a new analyst report suggested that any move toward a Bitcoin (BTC-USD) ETF won’t deliver much value Coinbase’s way at all.

The report in question came from Barclays via analyst Benjamin Budish. Budish noted that the approvals of spot Bitcoin exchange-traded funds wouldn’t give Coinbase much of a lift at all. While Budish acknowledged that Coinbase would be “…an integral service provider for the products,” Budish also noted that it was “…not immediately clear to us how successful ETF launches would translate into a meaningful P&L benefit for Coinbase.” Though Coinbase would end up as custodian for at least four such ETFs, the fees it would earn for doing so are comparatively small.

The news comes at a terrible time for Coinbase; it’s already facing an ongoing issue in “crypto winter,” as trading volume on Coinbase shares continues to decline. Moreover, reports note that Coinbase’s lobbying efforts in Washington may also fall on deaf ears as political issues demand further regulation and crackdowns against cryptocurrency. And then, just to top it off, Coinbase pulled 80 different trading pairs across its various platforms, noting that it was done to “…improve overall market health and consolidate liquidity.” It might also have been done as a cost-saving move, which Coinbase could likely use given the state of its shares of late, but that’s strictly speculation.

Is Coinbase a Buy or Hold?

Turning to Wall Street, analysts have a Hold consensus rating on COIN stock based on five Buys, seven Holds, and six Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average COIN price target of $85.50 per share implies 14.97% upside potential.

Disclosure