Goldman Sachs Downgraded Coinbase Shares, Expects Revenue To Drop

Goldman Sachs downgraded the Coinbase shares from “neutral” to “sell” as the exchange announced to be laying off 18% of its workforce but the Goldman analysts say that is not enough so let’s read more today in our latest Coinbase news.

The Coinbase shares dropped 9% to $56.88 after Goldman Sachs downgraded the company shares and lowered the price target to $45 from $70. Analyst Will Nance wrote to investors that further cuts are needed even when Coinbase said it will fire 18% of the workforce, in addition, to pull offers from upcoming employees:

“We believe current crypto asset levels and trading volumes imply further degradation in COIN’s revenue base.”

In investment terms, the neutral rating is not bullish nor bearish and a sell recommendation shows shares are likely to drop. Coinbase as the biggest exchange in the US started trading on NASDAQ back in April and the shares declined 85% from COIN’s debut at $381 as BTC and other assets crashed as well and resulting in fewer trades from which the company earned commissions. The downgrade from Goldman came a few days after Moody’s downgraded the Coinbase corporate debt and wrote:

“Today’s rating action reflects Coinbase’s substantially weaker revenue and cash flow generation due to the steep declines in crypto asset prices that have occurred in recent months and reduced customer trading activity.”

As recently reported, Coinbase will launch a Coinbase derivatives exchange formerly known as FairX and will offer futures priced at 1/100^th of a BTC. The retail investors will be able to trade crypto futures via Coinbase on Monday as the biggest exchange in the US by volume will offer them on the Derivatives Exchange Platform. The move came after Coinbase acquired FairX as a part of its goal of offering crypto futures and options trading to customers. FairX was selling futures products and was registered with the CFTC which gave Coinbase a running start on the $3 trillion derivatives market.

Also, The BTC coinbase Premium gap reaches zero and the on-chain data shows that it improved recently nearing the neutral value, suggesting the selling pressure could be drying up. As pointed out by analyst CryptoQuant, the selling pressure from US Investors seems to have reduced in the past few days. The BTC Coinbase Premium Gap is an indicator that measures differences in BTC prices connected on exchanges Binance and Coinbase.