- Cowen cited a lack of clarity about a possible trading volume rebound after the FTX collapse.
- Cowen also lowered its price target for the shares
- Coinbase is one of the most secure platforms for trading.
Cowen, an investment and financial services firm with offices in the US, Europe and Asia, downgraded Coinbase shares from market perform to outperform.
They cited the lackluster clarity surrounding a possible trading volume recovery in the wake of the collapse of FTX, a rival crypto exchange. CNBC reported.
Premarket session saw shares fall to $37
Cowen also lowered its price target for shares from $75 to $356, nearly half off. The stock fell to $37.14 in the premarket session. It lost 1.5%. Coinbase shares fell 84% last year.
Positive predictions despite current developments
It remains to be seen how Coinbase will perform in 2023. Experts believe that the company is secure and has many features that make it one among the most trusted platforms for crypto trading, buying and selling.
Regulators are subject to more scrutiny
The collapse of Sam Bankman-Fried’s exchange sent shock waves throughout the industry. According to insiders, one effect will be a more rigorous scrutiny by watchdogs such as the US Securities and Exchange Commission.
Lower retail trade volumes will result from lower crypto valuations
A drop in crypto valuations will lead to lower retail trading activity. Institutional investors are still interested, but they are being more careful and doing thorough due diligence in each sector. In a note, Stephen Glagola and George Kuhle, analysts, wrote:
COIN’s business is significantly correlated to crypto asset prices, trading volumes and volatility.
Visibility is still low
The leading US exchange’s monthly trading volumes have been declining fairly consistently each month since the universal all-time high in November 2021.
Given the FTX contagion threats, the macroeconomic backdrop and their compounded effects upon crypto prices, visibility is low to a rebound and stabilization in retail trading volumes for the current year.
