• Analyst Dan Dolev of Mizuho has issued a warning that Coinbase stock could tank 40% from its current level.
• The warning is based on a survey that suggests retail traders are not participating much despite the recent rise in Bitcoin’s price.
• Dolev’s bearish note on the Coinbase stock cites potential headwinds brewing for 2023 revenue.
Coinbase Global Inc, the leading cryptocurrency exchange, could be in for a downturn in the coming weeks and months. This is according to Dan Dolev, a senior analyst at Mizuho, who has recently reiterated his „underperform“ rating on the company and announced a $30 price objective. This represents an alarming 40% downside from Coinbase’s current price point.
The warning is based on a survey conducted by Mizuho which suggested retail traders are not participating much despite the recent surge in Bitcoin’s price. Retail trading is a primary source of revenue for Coinbase, accounting for 83% of the company’s revenue in 2021. The survey, coupled with disappointing market share data and potential signs of take rate pressures in Q4, indicate the potential for further headwinds in 2023.
The survey revealed that 90% of traders who sat on the sidelines in December are still inactive this month, and over 33% that traded last month have since decided to sit it out. This could have a big impact on Coinbase’s growth, given that the company relies heavily on retail traders for its profits.
Coinbase’s stock has surged in recent weeks, despite the company’s announcement that it is ending its operations in Japan. However, Dolev believes these gains could be short-lived, citing the potential for take rate pressures and market share losses in the near future.
It remains to be seen whether Coinbase can weather the storm and recover its year-to-date gains, or if it will succumb to the bearish predictions of Mizuho. Whatever the outcome, Coinbase stockholders should keep a close eye on the company’s performance in the coming weeks and months.