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, -4.88% 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, -2.72% traders showed “significant user overlap” among Coinbase, PayPal Holdings Inc. PYPL, -1.65% and Square Inc.’s SQ, +0.04% 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, -0.94% has slipped 0.2%.
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