Investors may be better off owning bitcoin directly versus buying shares of Coinbase Global to avoid expected headwinds, including increasing competition and the ongoing “commoditization of cryptocurrency exchanges,” Mizuho Securities USA told clients in a note Thursday.
Mizuho has a neutral recommendation on Coinbase shares and a $300 price target. Coinbase was recently trading at around $339 per share.
Analyst Dan Dolev also said that yield compression continues to be a headwind for Coinbase, and “isn’t limited to one type of market condition.”
Mizuho noted the performance of bitcoin and Coinbase have been similar since the latter’s first day of trading on April 14, with bitcoin up about 2% since then and Coinbase stock up by nearly the same amount.
Coinbase shares fell earlier this week after third-quarter results missed expectations. The stock was up about 3% on Thursday.