Coinbase Downgrade to Sell as Retail Crypto Interest Cools
Compass Point Capital has issued a Coinbase downgrade, assigning a sell rating and cutting the price target to $126. The firm cites a cooling retail crypto interest, a drop in monthly transacting users, and lower average revenue per user. Bitcoin and Ethereum trading volumes have slumped to multi-month lows, intensifying pressure on Coinbase’s fee-based revenue.
The Coinbase downgrade also reflects missed subscription and services revenue and a Q3 forecast midpoint below analyst consensus. Rising competition from low-fee exchanges and DeFi platforms threatens core trading volumes. Regulatory uncertainty over market reforms could delay growth initiatives until 2026.
Traders should expect heightened COIN volatility and cautious sentiment. The downgrade signals that retail engagement must rebound or revenue streams diversify before COIN can regain momentum.
Bearish
Both Compass Point reports highlight a Coinbase sell rating driven by weakening retail crypto interest, falling trading volumes, and revenue shortfalls. In the short term, these factors could trigger heightened volatility and downward pressure on COIN shares as investors adjust expectations. Over the long term, persistent competition from low-fee exchanges and delayed regulatory reforms may hinder Coinbase’s ability to restore growth and margin expansion. Unless Coinbase can diversify revenue streams or see a robust rebound in retail engagement, the stock is likely to face continued selling pressure.