Coinbase is facing growing pressure as slowing cryptocurrency trading activity and uncertainty surrounding the Binance hack threaten its revenue outlook. Morgan Stanley has downgraded the crypto exchange, warning that its earnings recovery could take longer than previously anticipated.
The investment bank also slashed its Coinbase stock price target by more than 50%, adding to concerns about the company’s financial performance and future profitability.
Morgan Stanley Slashes Coinbase Price Target by 53%
Morgan Stanley analyst Michael Cyprys reduced Coinbase’s (COIN) price target from $258 to $120 on Monday, representing a decline of approximately 53%.
The decision reflects weakening trading activity, lower revenue expectations, and ongoing uncertainty across the cryptocurrency market. Concerns have intensified following the reported $6.3 billion Binance hack, which has further shaken investor confidence.
Despite the downgrade, Morgan Stanley continues to recognize Coinbase as a major competitor in the cryptocurrency industry. However, the bank now expects a slower recovery in profitability, potentially creating additional downward pressure on its shares.
Coinbase Earnings Reveal Sharp Revenue Decline
The downgrade follows Coinbase’s disappointing third-quarter earnings report, released on October 29.
The cryptocurrency exchange reported net revenue of $1.16 billion, marking a roughly 34% decline compared with the same period last year.
Meanwhile, Coinbase recorded $719 million in net income. However, gains from cryptocurrency investments accounted for much of that figure, while adjusted net income reached just $78 million.
These results raised concerns about the company’s underlying profitability, particularly as weaker trading activity continues to affect transaction-related revenue.
Crypto Stocks Slide Following Coinbase Earnings
Coinbase’s financial results triggered a broader selloff among cryptocurrency-related stocks on Friday.
During midday trading, Coinbase shares plunged more than 13%, reflecting growing investor concerns over the exchange’s earnings outlook and the fallout from the Binance security breach.
Other major crypto-linked companies also experienced significant losses. Circle shares declined more than 9%, while Strategy dropped approximately 8%.
The widespread weakness highlighted the cryptocurrency sector’s sensitivity to disappointing corporate earnings and negative industry developments.
Coinbase Stock Extends Losses as Market Pressure Builds
Selling pressure continued into Monday, with Coinbase shares falling more than 3.3% to approximately $138, according to Yahoo Finance data available at the time of reporting.
The latest decline adds to an increasingly challenging environment for the cryptocurrency exchange as investors reassess its growth prospects.
Although Coinbase remains a significant player in the digital asset industry, slower trading volumes, weaker earnings expectations, and heightened market uncertainty could continue to weigh on its stock performance.
