Coinbase Global Inc. (COIN) saw its shares fall 5.46% in after-hours trading, dropping to $215.85, after Bank of America Securities (BofA) cut its price target on the stock by 14%, citing concerns over growing competition and fee pressure.
BofA Lowers Coinbase Price Target to $311
BofA revised Coinbase’s price target from $363 to $311 while maintaining a hold rating. According to analyst Mark McLaughlin, CFA, the adjustment follows strong earnings performance, fueled by a favorable crypto market and increased on-chain activity. However, McLaughlin questioned the sustainability of this momentum, noting that:
- Rising competition could put downward pressure on trading fees, affecting Coinbase’s short-term profitability.
- The company remains heavily reliant on transaction revenue, making it vulnerable to market fluctuations.
- Traditional financial institutions entering the crypto space may intensify competition, affecting Coinbase’s market dominance.
Regulatory Risks Still Linger
Despite the U.S. Securities and Exchange Commission (SEC) dropping its lawsuit against Coinbase, regulatory risks remain. The SEC had accused Coinbase of operating as an unregistered securities exchange in 2023, making it one of the agency’s biggest enforcement actions under former Chair Gary Gensler.
While the case’s dismissal is a positive development, analysts warn that regulatory scrutiny could continue, particularly as the crypto industry evolves.
Crypto Market Turbulence Adds Pressure
The price target adjustment also coincides with a broader downturn in the crypto market. According to CoinGlass data, the market experienced $1.49 billion in liquidations in the last 24 hours, with Bitcoin (BTC) dropping below $89,000, marking its lowest level since Q4 2024.
- Matrixport analysts warn that BTC’s decline could continue, with low trading volumes limiting dip-buying interest.
- Spot On Chain analysts predict that Ethereum (ETH) could be heading for its worst February, citing macroeconomic uncertainty and new trade tariffs from the Trump administration as contributing factors.
What’s Next for Coinbase?
Coinbase remains a leader in the crypto exchange space, but with intensifying competition, regulatory uncertainties, and market volatility, analysts are cautious about short-term price movements. The company’s reliance on transaction fees could pose challenges if trading activity slows or new entrants offer lower-cost alternatives.
For now, investors will be watching how Coinbase navigates the evolving landscape, as well as how the broader crypto market responds to ongoing economic and regulatory pressures.
