Coinbase's (NASDAQ: COIN) share price target was cut to $46 from $67 per share at Atlantic Equities on Monday by analyst Simon Clinch.
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The company's shares are up over 2% premarket Monday after a more than 5% climb Friday, but TheFly quoted Clinch as saying he believes the “shocking collapse” of cryptocurrency exchange FTX “could be the pinnacle event that extends the duration and downside risks of the prevailing crypto winter.”
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The analyst, who maintained a Neutral rating on the stock, explained in a research note to clients that the crypto industry is now “following a similar path to technology stocks in the aftermath of the dotcom bubble in the late 1990s/ early 2000s.”
He added that the decline of FTX and founder Sam Bankman-Fried adds further downside pressure “by eroding [the] trust of consumers, regulators, and politicians, and raising the risks of additional contagion effects.”
However, while Clinch believes Coinbase is well-positioned to “both survive and benefit from these events,” he said that the “overwhelming headwinds” from a prolonged crypto winter have resulted in him lowering Coinbase's forward estimates significantly.
The analyst lowered Coinbase's fiscal 2023 and 2024 net revenue estimates by 30% and 44% respectively.
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