• Dan Dolev, a senior analyst at Mizuho, has warned that Coinbase stock could tank 40% from its current price.
• The warning is based on a survey that suggests retail traders are not participating much in the recent surge of Bitcoin.
• Dolev has reiterated his “underperform” rating on the cryptocurrency exchange and has set a $30 price target.
Coinbase Global Inc, one of the world’s leading cryptocurrency exchanges, could be set for a steep decline in the coming weeks and months. This is according to a warning by Dan Dolev, a senior analyst at Mizuho. Dolev has given an “underperform” rating on Coinbase and has set a price target of $30, which represents a 40% downside from its current price.
The warning is based on a survey that suggests retail traders are not participating much in the recent surge of Bitcoin’s price. Retail trading is the bread and butter of Coinbase, as it accounted for 83% of the exchange’s revenue in 2021. The survey revealed that 90% of the traders that were on the sidelines in December continue to be inactive this month, and over 33% that traded last month have sat the January activity out.
Dolev also cited market share data and potential signs of take rate pressures in Q4, which could lead to more headwinds for Coinbase in 2023. Coinbase stock is currently up over 50% for the year, despite the recent announcement that the exchange is ending its operations in Japan.
The news from Dolev is concerning for Coinbase investors, as the exchange has been one of the major beneficiaries of the recent surge in cryptocurrency prices. However, if Dolev’s prediction is correct, Coinbase stock could make a new low in the coming weeks and months. It remains to be seen how the market and investors will react to this warning.