Coinbase stock falls toward 4th-straight loss, after first non-bullish analyst starts coverage

Analyst Dan Dolev at Mizuho broke ranks with his Wall Street peers, as he became the first to initiate coverage of Coinbase Global Inc.
COIN,
-0.66%

with something other than the equivalent of a buy rating. Dolev set a neutral rating for the cryptocurrency exchange, and a stock price target of $285, which was 6.6% below current levels. The stock fell 2.2% in midday trading toward a four-day losing streak. Dolev said that while Coinbase was a “major share gainer,” the risk of pricing pressure offsets opportunities surrounding the stock. “Over time, COIN’s fees may face downward pressure from competing platforms following the footsteps of zero-commission stock trading, because platforms like PayPal and Cash App primarily use crypto trading products as engagement tools,” Dolev wrote in a note to clients. “In contrast, COIN relies on commissions for the vast majority of its revenue.” He said a survey of several hundred bitcoin
BTCUSD,
-0.17%

traders showed “significant user overlap” among Coinbase, PayPal Holdings Inc.
PYPL,
+1.15%

and Square Inc.’s
SQ,
+0.23%

Cash App, and 55% of those surveyed consider “low transaction fees” as the second-most important quality of crypto trading app platforms, behind just “security.” Coinbase’s stock has lost 10.8% this week, while bitcoin has declined 10.6% and the S&P 500
SPX,
+0.24%

has slipped 0.2%.