An autonomous research analyst, Christian Bolu, explained recently that Coinbase risks losing its reputation despite the current crypto boom. He explained that Coinbase will have to step up its game if it intends to secure a position as a major player in the crypto-trading sphere.
On Wednesday, he uploaded an aggressive note that talks about Coinbase’s current market condition. He said that the crypto firm is losing the value of its market share at a rapid pace. And considering the high level of the take rate compression, he expects that these trends will move up. At the same time, competition with rivals will increase. Among its competitors, Binance, FTX, and Robinhood are the most dangerous.
The autonomous analyst began covering Coinbase by giving it an underperforming rating. This is a recommendation implying that the concerned cryptocurrency is likely to do a bit worse compared to the rest of the market. Other ways to refer to underperform include underweight, weak hold, and moderate sell.
But it’s even more concerning how Coinbase is managing to lag on just about every crypto-related innovation. This sphere involves the launch of new NFTs, derivatives, and altcoins. If Coinbase continues at this rate, the trend can continue forward, which can mean dangerous consequences. Eventually, Coinbase will end up losing its relevance among crypto enthusiasts. This will end up quite similar to what happened with Netscape in the early era of the internet.
He started by initiating Coinbase coverage with a price tag of $160. Or, he could face a likely downside risk of $160 from the present levels. During pre-market trading, Wednesday, the shares for Coinbase dropped by only one percent. This caused the value to go down to $248.30.
At the same time, Coinbase’s shares have gone down by almost a quarter over the last half-year. This is even though the recent Bitcoin rally helped bring up the price of the flagship cryptocurrency, along with other altcoins.
As of yet, the stock is still below an appropriate closing price, which is almost $330. This is from the first trading day of April 14, as investors grow concerned about the slowly increasing competition. A big chunk of the rivals is crypto platforms like Robinhood, which can raise the stakes for investors.
According to other experts, the unending concern about fee compression is negatively affecting the stock. Meanwhile, Bolu had a different statement for Robinhood. He initiated the stock by giving it an outperform rating, along with a price target of $55. This is a 38 percent increase from the current levels.
After an extensive increase in users in the last two years, experts predict revenue growth in the future to be a result of more monetization.
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