Coinbase Downgraded as Q1 'Likely Mild,' Say Monness, Crespi, Hardt
Shares of Coinbase (COIN) were downgraded by analyst firm Monness, Crespi, Hardt on Tuesday, citing concerns about weaker-than-expected Q1 2025 results and a less-than-stellar outlook for Q2. The move comes as the cryptocurrency exchange market faces a slowdown after a strong start to the year.
🔻 Downgraded to Neutral from Buy, Price Target Removed
Analysts at Monness have officially downgraded Coinbase stock from Buy to Neutral, while removing their previous price target, due to expectations that first-quarter revenue will be "likely mild" compared to previous forecasts.
“We downgrade to Neutral… on potentially mild Q1/25 concerns,” the analysts said in a note to clients.
📉 Trading revenue forecast to decline 12%
According to the analysis, trading revenue in Q1 is estimated to decline by around 12% QoQ, partly due to the increased share of stablecoins, which offer lower transaction fees.
Experts also warn that subscription products and services related to Ethereum – which are part of the revenue diversification strategy – may not be properly priced by the market, leading to expectations being misaligned with reality.
🧩 Regulatory risks remain
Another major concern is regulatory uncertainty, especially after the GENIUS Act – a proposed framework for stablecoins – stalled in the US Congress. Nine Democratic senators withdrew their support, leaving the bill short of the necessary votes to pass.
Monness warned that if this law is not properly regulated, the crypto industry in general and Coinbase in particular could face fragmentation in oversight and compliance, limiting future expansion.
🌤️ A bright spot: Market share remains stable
Despite some negative short-term macro and financial signals, Monness noted that Coinbase has maintained a solid trading market share. “The trading volume ratio appears to be remarkably healthy,” the analysts wrote, noting that the decline in March and April was milder than the overall market.
🧠 Conclusion
Coinbase’s downgrade is a reminder to investors that the crypto market remains extremely sensitive to revenue and regulation. However, with its strong position in the industry and its ability to adapt to market conditions, Coinbase could still recover if fundamentals such as trading volume, regulation, and technological innovation improve in the coming quarters.