Goldman Sachs Lowers Coinbase’s Rating To “Sell”
- Goldman Sachs analysts downgrade Coinbase to a sell rating.
- Coinbase has declined by almost 85% since November 2021.
- The crypto exchange recently downsized its team by 18%, firing 1100 employees.
Coinbase’s troubles continue to intensify, with global banking and investment firm Goldman Sachs now giving up on the asset.
Trading on the US stock index, Coinbase has not been faring well for a while, and analysts and traders are beginning to retrieve their optimism toward the stock.
Goldman Backs Off
According to a note received by Bloomberg from Goldman analyst William Nance, the decision to cut Coinbase’s rating came after the stock began declining and extended beyond 75% this year.
Coinbase’s rise was in sync with the rise of the cryptocurrency market’s value, and as a result, in the span of just a few months, COIN exploded and held a market cap of more than $75 billion at its highest.
However, following the decline, the stock’s price plunged from $368.9 in November 2021 to $56 at the time of writing. Having dropped by 10.88% already during the intra-day trading, COIN might end up closing below $56.
Commenting on the downgrade in rating, Nance said,
“We believe Coinbase will need to make substantial reductions in its cost base in order to stem the resulting cash burn as retail trading activity dries up.”
According to the trading price of $55.4 at press time, the market cap of Coinbase was reduced to just $14.5 billion, with Coinbase holding 20 buy ratings, six holds, and five sell recommendations as per data from Bloomberg.
Down by 84.91% since November last year, COIN achieved the oversold status back in May and since then has been stuck in the bearish zone for almost three months now, indicating no signal of a rise.
But with the broader crypto market noting some semblance of recovery, COIN could benefit from it and find some growth.
Coinbase Is Getting Rid of Its Employees
As reported by FXEmpire earlier last week, Coinbase, along with many other crypto-affiliated companies, laid off their employees owing to the depreciating economic conditions followed by the crash of the crypto market.
In an announcement, the cryptocurrency exchange decided to cut down its team by 18%, laying off 1,100 people as a result.
The CEO of Coinbase, Brian Armstrong, in accordance with this decision, was noted saying,
“We saw the opportunities, but we needed to massively scale our team to be positioned to compete in a broad array of bets. While we tried our best to get this just right, in this case, it is now clear to me that we over-hired.”