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Find new investment opportunities based on Market Sentiment Indicator. Manage watchlist risk with leading indicator of volatility See what influential analysts and investors are saying about stocks in your watchlist
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06 May 2025Coinbase is under pressure this week after its stock was downgraded from Buy to Neutral by financial advisory firm Monness, Crespi, Hardt & Co. The firm also withdrew its prior price target of $275, citing concerns that Coinbase may miss analyst expectations in its upcoming Q1 earnings report scheduled for Thursday.
Despite a notable recovery since hitting a low of $151.47 in April, analyst Gus Galea recommends short-term caution. He notes that while initial May trading volume data suggests a slight improvement over April, the available information remains too limited to draw long-term conclusions.
Coinbase’s revenue model relies heavily on crypto trading fees. While the company doesn’t charge directly for its staking services, it does take a cut from users' staking rewards. In addition to being a trading hub, Coinbase plays a pivotal role in the stablecoin ecosystem. It co-founded USDC, a U.S. dollar-backed stablecoin, and is expected to benefit from increased regulatory clarity in the sector.
The price of Bitcoin has dipped to $78,000, adding to the pressure on crypto-related stocks. This volatility raises the stakes for Coinbase’s earnings and strategic positioning in a rapidly evolving industry.
Regulation is another critical factor. Hopes for the U.S. to become the “global crypto capital” have been fueled by Trump’s presidential campaign, which promises reduced oversight. However, legislation remains fragmented. The GENIUS Act, offering a lenient framework for stablecoin issuers, recently lost momentum in the Senate. Meanwhile, the competing STABLE Act has advanced further and would require issuers like Coinbase to obtain a banking license — something the company is reportedly exploring.
Galea believes that broad bipartisan support for a clear, consistent regulatory framework would ultimately benefit Coinbase. Despite short-term challenges, he sees legal recognition of stablecoins as a potential net positive for the company’s long-term growth.
Coinbase currently trades at a $50 billion market cap, but shares are down 20.9% year-to-date and 13% over the past 12 months - underlining why the upcoming earnings report could be a major turning point.
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