Crypto Exchange Coinbase Loses a Wall Street Bull on FTX Fallout

Crypto exchange Coinbase (COIN) is now faced with a number of new headwinds due to the collapse of rival FTX, said Bank of America, downgrading the stock to neutral from buy.

Alongside, the bank slashed its price target to $50 from $77. COIN is up marginally in premarket action to $49.23, but down nearly 30% since the start of the month.

While BofA is confident that Coinbase is not another FTX, that fact does not “make them immune from the broader fallout within the crypto ecosystem.”The analyst team sees three potential headwinds: Dampened trading activity thanks to weaker confidence in crypto, delayed regulatory clarity, and the possibility that contagion leads to an even wider fallout for the industry.

Longer term, said the bank, the FTX debacle may lead to market share gains for Coinbase as the exchange can point to its focus on regulatory compliance and security of customer assets.

Bank of America had previously been a bull all year on Coinbase, on Jan. 6 giving the stock – at that time trading above $230 – a buy rating and $340 price target.

Read more: US-Listed Crypto Trading Platforms Coinbase, Bakkt Gain After FTX Bankruptcy Filing