Cowen downgraded Coinbase (COIN) shares and cut their price target because to the FTX scenario.
In December, Mizhuo downgraded Coinbase to "underperform," predicting a 30% drop in COIN shares.
Analysts at financial services company Cowen downgraded the cryptocurrency exchange Coinbase on Thursday. Following the demise of FTX and the general drop in trading volumes in the cryptocurrency market, crypto firms are under more scrutiny than ever. The price of COIN decreased by 6% during pre-market trading, and it is currently trading close to the $35 mark.
Despite investors' hopes for a revival in the cryptocurrency market, Cowen downgrades Coinbase share (COIN) from "Outperform" to "Market Perform."
The failure of Sam Bankman- Fried's exchange FTX, in the opinion of Cowen analysts Stephen Glagola and George Kuhle, has intensified scrutiny from the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
Since November 2021, COIN's monthly trading volumes have been declining fairly steadily each month. Given the macroeconomic environment and the risks of FTX contagion on the prices of crypto assets, there is currently little indication that retail trading volumes will stabilise or increase over 2023.
The analysts increased their COIN price objective from $75 to $36. From $232 a year ago to $37.70 at Wednesday's close, Coinbase share prices dropped by almost 84% in 2022. The COIN price is $35.12 at the time of writing, down 6% during pre-market trade.
Additionally downgrading Coinbase to "underperform" in December, Mizhuo warned that the COIN stock may fall by 30%. The main causes of the downgrade were the decline in revenue brought on by the ongoing decline in cryptocurrency prices and the FTX problem.
The New York State Department of Financial Services has also levied a $50 million punishment against cryptocurrency exchange Coinbase for allowing users to open accounts without undergoing background checks. The exchange will also spend an additional $50 million to improve its compliance programme.
Experts are yet optimistic about the cryptocurrency market's revival in 2023. Cathie Wood, CEO of Ark Invest, has been investing in Coinbase stock because she thinks things will change in 2023. Wood added that the price of Bitcoin will reach $1 million by 2030.
