By Vlad Schepkov
Mizuho analysts issued a warning to Coinbase (NASDAQ:COIN) investors, noting that those "excited about Bitcoin's rally to $30K" could be in "for a rough awakening", and cited dropping average trading volumes as key reasoning behind his bearish thesis.
In their latest report on America's largest crypto exchange, the analysts noted that despite Bitcoin moving back above $30,000 in recent weeks, retail trading at COIN, which "accounted for 70% of total revenue in 2022," has actually recorded a sharp drop, as measured by average daily trading volumes at the exchange - "<$1bn in April vs. $1.6bn in March."
The analysts believe the rally is explained by "large institutional players are buying Bitcoin in hopes that retail would follow," and yet "retail seems uninterested."
They further note that "COIN's market share remains stagnant in April vs. March" signaling limited retail interest, and sees "more muted increases in ETH vs. BTC" as evidence "that this is not a broad-based crypto renaissance."
As such, Mizuho sees no justification for COIN's recent advances - shares are up 15% over the past month, and are gaining an additional 3% in pre-market on Thursday - and reiterates an "Outperform" rating with $30 Price Target.
COIN closed at $67.84 yesterday, implying over 50% downside.