Due to the failure of rival FTX, Coinbase is now facing a variety of additional challenges, according to Bank of America, which Friday lowered its recommendation for the company from buy to neutral.
Additionally, the bank reduced its price estimate from $77 to $50. Since the beginning of the month, shares of Coinbase have decreased by about 30%.
Although Bank of America is certain that Coinbase is not another FTX, this does not shield the business from the wider repercussions in the cryptocurrency market. Analysts led by Jason Kupferberg said in a note to clients, which showed by Yahoo! Finance:
“We think Coinbase likely faces a number of new headwinds over the near/medium-term due to the recent collapse of rival crypto exchange FTX.”
Bank of America’s downgrading of the stock referenced an interview Coinbase CFO Alesia Haas made to The Wall Street Journal this week in which Haas stated that the company’s earnings would be impacted by a material decline in the price of Bitcoin.
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