Coinbase Stock Plunges 20% Alongside Bitcoin, But Analysts Say Selloff Is Overblown
Despite Market Turmoil, Trading Volumes Suggest Coinbase’s Decline May Be Temporary
Shares of Coinbase tumbled nearly 20% on Monday as part of a broader market downturn, with the Nasdaq suffering its worst session since 2022. This steep drop has pushed the cryptocurrency exchange’s year-to-date losses to roughly 25%. However, analysts at Mizuho Securities argue that the selloff may be exaggerated.
Since February 20, Bitcoin has plunged from approximately $98,000 to $79,000, while Coinbase stock (COIN) has fallen around 30%—far outpacing the S&P 500’s 9% decline. Despite this downturn, Mizuho’s analysts, led by Dan Dolev, believe the reaction in COIN shares has been excessive.
Their confidence stems from strong trading volumes on the platform. Mizuho had previously projected $4.5 billion in daily spot trading for Coinbase in Q1 2025. But despite Bitcoin’s decline, average daily spot volumes have actually increased to $5 billion. In response, the firm has revised its revenue estimates for the quarter from $2.23 billion to $2.31 billion.
Mizuho has also reaffirmed its price target for Coinbase at $217—significantly above its current price of around $191, according to data from The Block. Analysts acknowledge that while heightened market volatility should continue driving strong trading activity, they remain cautious about long-term pricing pressures due to rising competition in the crypto sector.
Dolev also pointed out that Coinbase’s retail take rates remain relatively high. He warned that regulatory shifts under the Trump administration, combined with the increasing presence of Bitcoin ETFs, could lead to more intense competition and downward pressure on fees.
Coinbase’s latest earnings report highlighted impressive growth, with Q4 2024 revenue surging to $2.3 billion—more than doubling from $953.7 million in the previous year. Transaction revenue alone soared 172% to $1.6 billion. Meanwhile, rival platform Robinhood reported a 700% jump in cryptocurrency trading revenue, reaching $358 million.
While Coinbase faces uncertainty, strong trading volumes indicate that the stock’s steep decline may not fully reflect the company’s resilience. Whether this presents a buying opportunity remains a point of debate among investors.
