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- Analyst William Blair said Coinbase shares appear to be in danger after falling nearly 26% from their March highs.
- The analysts said that the limited sales have already started to be bought, while the growth of USDC is improving the opinion of Coinbase and Circle.
Coinbase may be entering a profitable season from a weak position on the chart, but that’s why some analysts now feel that the stock looks more risky, not more.
William Blair researchers Andrew Jeffrey and Adib Choudhury he said their expectations for Coinbase have been revised after the shares returned the most for the first quarter. Since peaking in March, COIN has fallen about 26%, a move analysts say has already taken a toll on the frustration associated with limited trading.
Soft selling appears to be more of a mystery than a known problem
That is the basis of calling. Coinbase is still facing low fees and reduced trading costs, but William Blair’s opinion is that investors already know that. The researchers noted that this trend has been decreasing over the years, making the slow decline sound more like a slow change than a new shock.
In this situation, first quarter earnings may be lower than usual. Coinbase is expected to report on May 7, but William Blair said that the soft results will not change the market dynamics because the correction has already taken place.
This is not the same as saying that the quarter will be strong. It’s more than expectations have been lowered enough for weak numbers to fall with less power.
USDC is becoming more important to Coinbase’s story
The most encouraging part of the sentiment comes from stablecoins, especially USDC. William Blair said that the development of the primary Coinbase stablecoin is managing the launch of not only Coinbase but also Circle.
This is important because Coinbase trading is no longer judged on trading activity. Investments are still important, obviously, but the company has been trying to increase its revenue through subscriptions, services and stablecoin-linked assets.
The USDC is well suited to this change. If sales remain soft, the growing stablecoin business gives Coinbase another way to get investors to focus on long-term investment rather than fluctuating quarter-to-quarter volume. For now, this seems to be enough for William Blair to argue that much of what is about to end has already ended.
