Coinbase (NASDAQ:COIN)
On Monday, the price target for Coinbase (NASDAQ:COIN) was lowered from $84 to $70 at Oppenheimer. At the same time, the firm’s analysts continued to retain a Buy recommendation.
On the other hand, they admitted that the failure of Silicon Valley Bank (NASDAQ:SIVB), Silvergate Capital (NYSE:SI), and Signature Bank (NASDAQ:SBNY) poses a threat to the growth of blockchain technology in the United States.
Experts said that the spectacular aftermath of SIVB, voluntary liquidation of SI, and sudden termination of SBNY have adversely harmed not only the ecology of digital assets but also the environment of Silicon Valley. “Although the emergency backstop will probably be able to sustain the financial system, these failures have already shattered certain major infrastructures of the public blockchain and digital assets business in the United States, including SEN and Signet,”
Oppenheimer anticipates increases in both trading volume and liquidity “decline until the hole is filled by someone else, and both USDC and the sector will continue to be plagued by uncertainty until then. Because of this, we are lowering both our revenue estimate and our PT for Coinbase to account for the increased risks, “the analysts further elaborated.
The analysts at Mizuho maintained their Underperform rating on Coinbase stock. They set a price objective of $30 for the cryptocurrency, referring to USDC as the “unstable coin.”
“After Circle revealed that $3.3 billion of its USDC reserves were stored at SIVB, COIN announced on Friday that it would temporarily suspend USDC conversions. This comes following Circle’s announcement. Because of this, the market capitalization of USDC dropped by more than 10%, and its value dropped below par for the first time since 2020. The money generated by USDC is essential to COIN, accounting for around 80% of the company’s interest income and 23% of the company’s overall revenue in the fourth quarter, “as the analysts had previously noted.
“According to our estimates, if the market capitalization of USDC continues to be at its present levels, this might reduce Coinbase stock revenue in 2023 by about 2%, with an even higher effect on profitability. If USDC losses persist unabated, the predictions that adjusted EBITDA would be positive in 2023 may prove excessively optimistic.
Featured Image: Unsplash @ PiggyBank
