Goldman Sachs analyst Will Nance downgraded the stock of Coinbase from $70 to $45. The bank said that one of the reasons was that there was a long period of turbulence in the cryptocurrency market and this will negatively impact the company. The recent crypto fall-out has been difficult for Coinbase to handle. The stock has been unable in the past 20 days to break out of its current trading range, which is ($141.09|5.48%).
Earlier in the month, Coinbase announced it will lay off 1,100 employees in an effort to cut costs. The restructuring will eliminate 18% of employees and bring the total headcount back to Q1 levels. Analysts believe that even these measures won't solve their current financial issues.
Over the past 10 weeks, investors have been picking up puts and fewer calls. This is a sign that people are anticipating the stock will decrease in value.
Brian Armstrong, CEO at Coinbase, reminded investors that a recession could lead to extended crypto winter. Past winters have seen trading revenue decline significantly.
Investors may want to stay away from investing in Coinbase stock due to the worsening situation.