Negatives of Coinbase deal with Circle outweigh positives, says Mizuho

Mizuho keeps an Underperform rating on Coinbase with a $27 price target after the company announced it has taken an equity stake in Circle and updated the revenue share agreement. The positive is reducing uncertainty regarding the company’s economic share of USD coin and there could be a modest uptick in Coinbase’s interest income, the analyst tells investors in a research note. However, the firm believes the negatives outweigh the positives. The Circle equity stake deepens Coinbase’s exposure to a “dwindling asset class,” casting doubt about the standalone business model of stablecoins, says Mizuho.