As Jefferies analyst, Trevor Williams began coverage of Coinbase stock (NASDAQ:COIN) with a Hold rating on the belief that it will be able to weather the industry-wide repercussions of failing crypto platform FTX, the stock of the cryptocurrency exchange surged 16.4% in early trading on Monday (FTT-USD).
Developments impacting Coinbase Stock Price
Williams wrote in a note about Coinbase’s (NASDAQ:COIN) strong balance sheet, which has more than $5 billion in cash, its “forward-looking approach to regulatory compliance,” and its small exposure to FTX (FTT-USD). On the other hand, he warned that in the middle of a long-lasting bear market, “the immediate effect is definitely not good, with trade volumes getting even lower.”
Coinbase’s (NASDAQ:COIN) market share has trended negatively over the past two years, well before the abrupt demise of FTX (FTT-USD) in November 2022, though “we expect some of these losses to be pared in the near-term… as COIN can re-establish its status as the de facto on-ramp into crypto, should we see another up-cycle,” Williams claimed.
With an 8.2% market share in December, Coinbase (NASDAQ:COIN) lagged well behind Binance (66.7%) in terms of the number of cryptocurrency trades.
Serge d’Adesky, a contributor to Seeking Alpha, told readers to short COIN after FTX broke down and a lot of people left the cryptocurrency market. Mike Fay, a fellow SA contributor, sees COIN as a “Buy”, citing positive factors like tighter U.S. cryptocurrency laws.
The stock of cryptocurrency broker Coinbase Global COIN went up by 5% in premarket trading in the United States. MicroStrategy (MSTR), a software company with a large amount of Bitcoin BTCUSD +2.01% in its corporate treasury, went up by more than 7% in the premarket, while cryptocurrency miners Riot Platforms (RIOT) and Marathon Digital (MARA) both went up by 4%. Futures based on the S&P 500 SPX +1.40% index, on the other hand, increased 0.3%.
Coinbase Stock Is Down As Cowen Downgrades It To ‘Market Perform’
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