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Coinbase Global: Mizuho downgrades COIN to Underperform; expecting depressed crypto volumes in '23-'24 (40.70 -2.11)
Analyst Dan Dolev commented, "Interest income from Circle's USD Coin (USDC) has been increasingly important for COIN amid deteriorating crypto sentiment and trading volume. We estimate it accounted for 10-15% of 3Q revenue. In this report, our proprietary analysis assesses the size and sustainability of this revenue stream. Our work helps quantify the potential adverse impact to COIN's profits should there be a downward adjustment in its share of interest income from Circle. We stress that this is purely a hypothesis on our part, based on observed trends in the industry. We expect depressed crypto volumes in 2023-24. Significantly reducing our 2024 revenue/EBITDA by -18%/-64%. PT to $30 from $42 (9x terminal EBITDA)."