Coinbase Rallies Despite Double Downgrade from H.C. Wainwright

Coinbase (COIN) shares climbed over 4% on Thursday, shaking off a rare double downgrade from investment bank H.C. Wainwright, which warned investors to brace for disappointing second-quarter results.

H.C. Wainwright analyst Mike Colonnese slashed his rating on the crypto exchange from buy to sell, citing concerns about weakening spot trading activity and a stock rally he believes has run too far.

“While we still view Coinbase as a ‘Best of Breed’ crypto exchange and remain bullish on the sector long-term, the stock’s ~150% surge since April has pushed valuation well beyond near-term fundamentals,” Colonnese said in a note to clients.

He flagged a potential “meaningful decline” in spot trading volumes on centralized exchanges for Q2, which could drag down Coinbase’s crucial transaction revenue. Still, he expects the company’s subscription and services business—including staking and custody—to exceed expectations.

Colonnese’s bearish stance stands in contrast to most other Wall Street analysts. Barclays, while predicting a soft Q2, has kept a neutral rating on COIN, and Oppenheimer remains optimistic with an outperform call.

Despite the downgrade, Coinbase shares gained nearly 4% Thursday, lifted by a continuing crypto rally. Bitcoin added another 2%, surging to a fresh record high above $113,000.