Coinbase Downgraded to Sell amidst Valuation Concerns
H.C. Wainwright has downgraded Coinbase Global (COIN) from Buy to Sell, citing valuation concerns after the stock surged roughly 150% since April. But the downgrade had little immediate impact—shares rose 4.04% today to $388.96, lifted by a broad rally in Bitcoin and crypto markets. Key points from the downgrade: Coinbase is now trading at 56x estimated 2025 earnings, well above historical averages. Analysts say investor enthusiasm has outpaced fundamentals, with crypto trading volumes declining quarter over quarter. While Coinbase benefits from over 50% of USDC reserve income, that stream isn’t enough to offset the slowing activity in its core exchange business. The firm advises investors to lock in gains after the massive run-up. Why the stock rose anyway: Bottom line: Coinbase is riding crypto optimism, but Wainwright warns that the fundamentals may not justify the price.
Bitcoin’s strong rebound today helped boost Coinbase, overshadowing the downgrade. Momentum in the crypto market continues to drive sentiment around COIN in the short term—even as analysts urge caution.