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Analysts said the lower rating follows the company’s 60% share price rally off of its recent lows.
“While the tenets of our recent upgrade remain in place, the risk/ reward looks less attractive at this level given continued regulatory challenges ahead and the surprisingly weak volume backdrop,” they wrote.
The analysts noted that while crypto prices have held onto their strength through 2Q23, volumes at Coinbase have remained subdued.
“Coinbase shares have now outperformed crypto markets in the recent rally, which could put the shares at relative risk in the near- to medium-term. Furthermore, despite the rally in crypto prices, the volume backdrop for Coinbase has failed to rebound. In fact, volumes are tracking down quite meaningfully versus 1Q23,” the analysts said.
