By Michael Elkins
Mizuho reiterated an Underperform rating and $30.00 price target on Coinbase Global Inc (NASDAQ:COIN) after a proprietary survey suggested that, despite January's Bitcoin rally, retail investors continue to shy away from crypto. The survey, coupled with disappointing market share data and potential signs of take rate pressure in Q4, may all mean that more headwinds are brewing for 2023 revenue.
Mizuho analysts wrote in a note, “Retail trading is COIN's bread and butter, as it accounted for 83% of total revenue in 2021. Retail take rates come at ~130bps vs. just 1-2bps for institutional. Our survey of COIN retail traders may point to more muted retail participation in the recent crypto rally than many bulls are hoping for.”
Mizuho surveyed more than 170 COIN retail customers. Specifically, investors were asked about their trading behavior in December and in January. A majority of the retail crypto traders surveyed remained inactive in January. Of the retail traders who did not trade crypto in December, only 11% reported trading crypto in January. This means that nearly 90% remained inactive.
Of the users that reported trading crypto on COIN in December, nearly one-third did not return to trade on the platform in January.
Shares of COIN are down 2.34% in pre-market trading on Tuesday.