Coinbase shares extend slide as Mizuho slashes revenue estimate

• Coinbase falls for the third day amid global crypto sell out

• Mizuho analyst warns of potential revenue miss in the first quarter

Shares of Coinbase Global Inc (NASDAQ: COIN) are on track to hit their lowest ever for the second time soon amid a broad-market tumble and a forecast from Mizuho Securities warning about the potential revenue miss in the first quarter. 

The largest crypto trading platform in the U.S. shed around 7.5% to $177.15 on Tuesday early trading but tried to recover some losses throughout the day as Bitcoin prices gained slightly.

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Coinbase hit its all-time low of $162.51 on Monday, down more than 60% from their 52-week high of $429.54,  amid the global crypto sell-off.

The company debuted on Nasdaq in April last year.

Over the last weekend, the broader crypto market has shed $350 billion and has lost around $1.60 trillion since November.

Share downgraded

Dan Dolev, a senior fintech analyst at Mizuho, cut Coinbase’s price target to $220 from $300 and said renewed signs of a “crypto desert,” alongside trading-fee compression, making the shares of the company very unattractive for the first half of 2022.

With crypto prices plummeting, all the analysts are closely watching the crypto stocks, suggesting that retail investors are pulling out.

“Just from a psychological perspective, there’s the possibility that a lot of crypto investors would say I am cutting my loss” once they see Bitcoin approach their break-even point, Dolev said.

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As Coinbase generates most of its revenue from trading fees, the subdued quarter-to-date trading volumes forced Mizuho to cut down its first-quarter revenue estimate to $1.38 billion, lower than the consensus of $1.75 billion among Wall Street analysts.

Moreover, Dolev said the platform is also facing pressure to reduce its fees to remain competitive.

Picture Credit: NRP