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Coinbase stock forecast: What now after the crypto exchange was fined?

By Nicole Willing and Peter Henn

Edited by Alexandra Pankratyeva


Updated

Coinbase app on a mobile phone
Will COIN survive the crypto winter? – Photo: Iryna Budanova/Shutterstock

The share price of US-based cryptocurrency exchange Coinbase (COIN) has dropped after the company was fined $50 by regulators in the United States.

The exchange was given the penalty by the New York Department of Financial Services (NYDFS) on 4 January after the regulator found that Coinbase treated its onboarding requirements for customers as a “simple check-the-box” and had not carried out sufficient background checks.

NYDFS superintendent Adrienne Harris said: “Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth. That failure exposed the Coinbase platform to potential criminal activity.”

Coinbase acknowledged the fine and, in a blog post, said that the investigation was based on the company’s compliance programme in 2018-2019, as well as the compliance backlogs that built up as the exchange grew in 2021.

It said: “We took NYDFS’s concerns seriously and have taken substantial measures to address these historical shortcomings.”

The exchange will also have to spend a further $50m on improving its compliance, and will have to work with a third-party monitor. As a result of the news, the price of COIN shares fell from $37.70 at close of trading on 4 January to $34.71 when markets opened the following day.  

The fine and the resulting price drop come soon after the collapse of FTX sent shockwaves through the markets. FTX, formerly the world’s third-largest cryptocurrency exchange by volume, recently filed for bankruptcy, highlighting the liquidity struggles the industry faces. 

In a blog post, Coinbase stated: “Currently we have $15m worth of deposits on FTX to facilitate business operations and client trades. We have no exposure to Alameda Research, and we have no loans to FTX.”

However, it is alleged that Coinbase plans to participate in the FTX bankruptcy proceedings to seek a claim on those deposits. 

Coinbase’s third-quarter results were also underwhelming, as the industry is braced for intensifying “macro headwinds”. Q3 transaction revenue fell to $366m, down 44% compared to Q2, driven by lower trading volume. The loss of earnings stood at $2.43 per share, adjusted, vs. the projected loss of $2.40 per share expected by analysts at Refinitiv.

Despite the plummeting revenue, however, user numbers exceeded analysts’ expectations.

As of 6 January, the stock has plunged by more than 85% since the same date a year ago, mirroring a disastrous 12 months for cryptocurrency..

Can the stock claw back its value, and what is the latest Coinbase stock forecast? Here we take a look at what factors shape the crypto exchange’s share price forecasts in the current market environment. 

Coinbase stock follows crypto markets lower

Coinbase went public on the Nasdaq Stock Exchange in April 2021 and initially traded above the early indicated price range at around $100, closing at $342 in the first session. 

The COIN stock price dropped to $224.35 a share in late May, coinciding with a cryptocurrency market sell-off, and then continued to follow the price trend, climbing to its peak of $368.90 in November when bitcoin (BTC) climbed to its all-time high.

The stock started 2022 at the $251 level, and continued to trend lower, closing at $103.74 on 6 May. The price then plummeted to $53.72 on 11 May, the day after the company announced weaker-than-expected first-quarter earnings. 

COIN

166.03 Price
-2.030% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 22:00 (UTC)
Spread 0.27

AMD

176.83 Price
-2.540% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 22:00 (UTC)
Spread 0.13

NVDA

798.54 Price
+0.950% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 22:00 (UTC)
Spread 0.36

SMCI

862.04 Price
-11.750% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 22:00 (UTC)
Spread 2.15

The move also coincided with the collapse of the terra (LUNA) cryptocurrency ecosystem, which prompted a broader cryptocurrency sell-off.

The share price moved up to $78.10 on 31 May, but again pulled back, dropping to $47.02 by the end of June. The price rebounded to $75.27 on 20 July, before retreating to $52.93 on 26 July and then rallying to $98.02 on 8 August 2022, more than doubling the share price from the June low.

The stock then dropped back to close at $87.68 on 9 August 2022, shedding more than 10% in the session.

Coinbase’s second-quarter net revenue totalled $803m, down from $1.17bn in the previous quarter and $2.03bn in the second quarter of 2021. Net loss for the quarter totalled $1.09bn, up from a loss of $430m in the first quarter and compared with a net profit of $1.61bn in the second quarter of 2021.

Coinbase noted that the total cryptocurrency market capitalisation declined by $1.3trn in the second quarter, around 60%, “primarily driven by macroeconomic conditions and shocks to the crypto credit environment.”

On 3 November, Coinbase published its third-quarter results for 2022. The Shareholder Letter stated:

“Q3 was a mixed quarter for Coinbase. Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volume moving offshore. Meanwhile, we saw strong growth in our subscription and services revenue, driven by our participation in the USDC ecosystem and higher staking activity.
“While the macro headwinds are beyond our control, we continue to focus on factors within our control: Narrowing our product focus to deliver amazing customer experiences and reducing our operating expenses.”

More recently, shares in Coinbase Global were down nearly 10% to $46.11, touching a new all-time low on 9 November following FTX’s collapse. As markets reeled, Coinbase, among other exchanges, has reaffirmed its commitment to keeping a safe hold on customer assets.

Coinbase CEO Brian Armstrong tweeted that his company doesn’t lend customer funds and added: “Coinbase doesn’t have any material exposure to FTX or FTT (and no exposure to Alameda)”.

Since then, though, the price has fallen as more people are avoiding cryptocurrency. 

What does that indicate for the Coinbase projected stock price in the coming years? The company noted in its shareholder letter that the cryptocurrency markets are cyclical. 

Coinbase stock forecast: Is the crypto exchange buy, sell or hold?

The average price target from 23 analysts who have issued a 12-month Coinbase stock forecast was $82.30, according to data compiled by MarketBeat as of 6 January 2023, with estimates ranging widely from a low of $30 to a high of $275. There were 10 ‘buy’ ratings, 10 ‘hold’ and four ‘sell’ recommendations.

Algorithm-based forecasting website Wallet Investor was bearish in its Coinbase stock forecast for 2023 at the time of writing, predicting that the share price would drop to a mere $0.000001 by January 2024, raising questions about the stock’s future.

Meanwhile, Panda Forecast had a Coinbase stock forecast for 2025 of anywhere between $27.80 and $35.26 by the end of the year.

If you are looking for a Coinbase stock price prediction, we recommend that you always do your own research. Look at the latest news, technical and fundamental analysis, and expert opinion before making any trading decisions. 

Note that analyst and algorithm-based Coinbase stock predictions can be wrong. COIN stock forecasts shouldn’t be used as a substitute for your own research. Remember that past performance is no guarantee of future returns, and never trade money that you cannot afford to lose.

FAQs

Is Coinbase a good stock to buy?

The Coinbase stock price is closely tied to cryptocurrency markets, which are high-risk, highly volatile assets.

Whether Coinbase is a good fit for your portfolio will depend on your risk tolerance and investing strategy. Note that analyst and algorithm-based Coinbase share price forecasts can be wrong, and that COIN stock forecasts shouldn’t be used as a substitute for your own research.

Remember that past performance is no guarantee of future returns, and never trade money that you cannot afford to lose.

Will Coinbase stock go up?

The COIN share price movement will depend largely on the direction of the cryptocurrency markets, as well as Coinbase’s financial performance. It’s important to do your own research to take an informed view of the share price – reading COIN stock price predictions from analysts is only part of that research.

Should I invest in Coinbase stock?

Whether you should invest in Coinbase stock is a decision that only you can make, based on your own personal circumstances and investing goals.

Bear in mind that past performance is no guarantee of future returns, and never invest any money that you cannot afford to lose.

Markets in this article

BTC/USD
Bitcoin / USD
51148.90 USD
-506.05 -0.980%
COIN
Coinbase Global Inc (Extended Hours)
166.03 USD
-3.44 -2.030%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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