Coinbase (NASDAQ:COIN) was downgraded to Sell from Hold at CFRA Research in a note on Tuesday, lowering the price target to $54 from $109 per share.
Analysts noted that shares of COIN have fallen 14% since the SEC approved spot Bitcoin ETFs and 25% year-to-date, following an "impressive 2023 recovery" that saw shares rise 400%.
"Looking ahead, we believe headwinds to a recovery in shares now outweigh the significant tailwinds experienced in 2H 2023, which we attribute to general market enthusiasm and a run-up in bitcoin prices," analysts wrote.
"While higher bitcoin prices generally benefit COIN through stronger transaction volumes and revenues, we believe the spot ETFs may lead more investors to look for crypto exposure off of the COIN platform and/or result in COIN reducing take-rates to remain competitive with new low-cost ETFs," they added.
CFRA also believes significant legal/regulatory headwinds remain in place for COIN, with the cryptocurrency exchange set for another day in court tomorrow with the SEC over whether crypto assets should be classified as "securities."
The firm maintained its 2023 loss per share estimate for Coinbase at -$0.98 and raised 2024's by $0.68 to -$0.47.