Coinbase Stock Advances Despite H.C. Wainwright’s Downgrade Over Trading Concerns
Coinbase (COIN) shares climbed more than 4% on Thursday, shaking off a rare double downgrade from H.C. Wainwright, which expressed caution ahead of the company’s second-quarter earnings.
H.C. Wainwright analyst Mike Colonnese lowered his rating on the crypto exchange from buy to sell, citing concerns over slowing spot trading volumes and a valuation he believes has outpaced the company’s near-term fundamentals.
“While we still see Coinbase as a top-tier crypto exchange and remain constructive on the sector overall, the roughly 150% rally in the stock since April has driven valuations beyond what short-term fundamentals support,” Colonnese wrote in a client note.
Colonnese anticipates a significant drop in spot trading activity on centralized exchanges during the second quarter, potentially hitting Coinbase’s primary revenue stream from transaction fees. However, he expects revenue from subscriptions and services, such as staking and custody, to outperform forecasts.
His bearish stance contrasts with other Wall Street views. Barclays predicts a softer Q2 but maintains a neutral rating, while Oppenheimer remains positive on COIN with an outperform rating.
Despite the downgrade, Coinbase shares ended the day higher, buoyed by strength across crypto markets. Bitcoin added another 2%, hitting a new all-time high above $113,000.
