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:
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.

Bottom line: Coinbase is riding crypto optimism, but Wainwright warns that the fundamentals may not justify the price.

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