Coinbase Stock Rises Despite Rare Double Downgrade

Coinbase (COIN) shares climbed over 4% Thursday, defying a rare double downgrade from investment firm H.C. Wainwright. Analyst Mike Colonnese cut his rating from “buy” to “sell,” citing concerns about slowing spot trading activity and a stock rally he believes has outpaced the company’s near-term fundamentals.

Colonnese noted Coinbase’s roughly 150% gain since April as unsustainable, especially ahead of what he predicts will be disappointing second-quarter results. He warned of a “meaningful decline” in spot trading volume across centralized crypto exchanges, which could negatively impact Coinbase’s primary revenue stream — transaction fees. Despite the bearish outlook, he acknowledged that the company’s subscription and services revenue, including staking and custody, may beat expectations.

The downgrade contrasts with broader Wall Street sentiment. Barclays, while also expecting a soft Q2, maintained a neutral stance. Meanwhile, Oppenheimer kept its bullish “outperform” rating on Coinbase, reflecting continued confidence in the exchange’s long-term prospects.

Coinbase's unexpected stock surge coincided with renewed strength in the broader crypto market. Bitcoin jumped another 2%, setting a new all-time high above $113,000, helping lift sentiment across crypto-related equities.

Despite short-term concerns, Coinbase remains widely regarded as a leading player in the crypto space. Its ability to diversify revenue through services like staking and custody could offer resilience if trading volumes decline. As the crypto rally continues, investors appear to be betting on Coinbase’s strategic positioning and long-term growth potential, even amid cautionary calls from select analysts.