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Date: 2025-02-25 12:51:09
BofA Securities has reduced its price objective for Coinbase Global Inc. due to increasing competition and pressure on fees, as reported by analysts.
The price target for Coinbase Global Inc. has been decreased by BofA Securities from $363 to $311, while maintaining a hold rating on the stock.
Mark McLaughlin CFA, an analyst at Bank of America Securities, explained that the decision followed Coinbase's robust earnings report, which was driven by a favorable cryptocurrency market and heightened on-chain activity. However, he expressed concerns about the sustainability of this momentum, as reported by TipRanks.
The analyst noted that intensifying competition could lead to a decrease in fees, which may negatively impact Coinbase's short-term profits.
McLaughlin also highlighted that despite the U.S. Securities and Exchange Commission dropping its lawsuit against Coinbase, risks continue to persist. In 2023, the SEC alleged that Coinbase was operating an unregistered securities exchange and offering unregistered securities.
The lawsuit against Coinbase was one of the commission's most significant cryptocurrency-related enforcement actions under former chair Gary Gensler.
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The analyst pointed out that the exchange continues to rely heavily on transaction revenue and that traditional financial institutions entering the space could introduce new competition. After the price target was lowered, Coinbase shares dropped 5.46% in after-hours trading to $215.85, according to Google Finance data.
The adjustment for Coinbase also comes as the cryptocurrency market experiences volatility, with $1.49 billion in liquidations over the past 24 hours, according to CoinGlass data. Bitcoin has fallen below $89,000, reaching its lowest level since Q4 2024. Analysts at Matrixport caution that the decline could continue, particularly with low trading activity limiting demand for dip-buying.
As previously reported, analysts at Spot On Chain also warn that Ethereum "could be heading for its worst February," as macroeconomic uncertainty, including new tariffs from the Trump administration "adds to the pressure."
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