Coinbase Stock Drops While Trade Volume Pattern Shifts: What’s Wrong?

The stock price of crypto exchange Coinbase has dropped significantly on Friday after negative outlook by analysts. The COIN price is currently down 3.63% during the day, which is the lowest level in last two months. While the trade volume on the crypto exchange continues to fall, Coinbase is faced with lowered outlook. Analysts trimmed down their outlooks for the cryptocurrency market.

Coinbase Trade Volume Under Pressure

The analysts found a drop in cryptocurrency trading volume in the third quarter. According to MarketWatch, J.P. Morgan analyst Kenneth Worthington reiterated his neutral rating on $COIN stock but cut his price target by 23% to $60. The target price is less than 1% below the current levels. In his note to clients, the analyst said the crypto volume continued to fall in September.

“Cryptocurrency trading activity remains under pressure in 3Q22, deteriorating in September.”

On the other side, another market outlook showed challenges to Coinbase’s ecosystem in the form of difficult crypto asset operating environment. According to credit rating agency Moody’s, the outlook for $COIN is negative. This is because of the challenges continue to drag on Coinbase’s free cash flow generation capacity. Amid the difficult operating conditions for the crypto ecosystem, the exchange’s management recently expressed concerns.

Coinbase Blames It On Tough Regulatory Atmosphere

Earlier this week, Coinbase chief executive officer Brian Armstrong said the the U.S. is becoming toxic for the nascent industry. The strong statements coming from the chief of the country’s largest exchange sparked a debate. He remarked that the U.S. can not afford to have cryptocurrency go offshore. Armstrong explained that enforcing regulation would have a negative effect. The country already saw a huge amount of crypto talent, asset issuers, and startups go offshore, he explained.

On a positive note, Coinbase continues to expand its operations in new territories. Recently, it became the first major global crypto exchange to receive regulatory approval in the Netherlands. The recognition as a crypto service provider will allow Coinbase to offer full suite of retail, institutional, and ecosystem products. The exchange already serves customers across almost 40 European countries.