Coinbase Price Target Cut by 50% After Post-Earnings Selloff

Morgan Stanley has turned more cautious on Coinbase, cutting its stock price target by more than half and warning that the cryptocurrency exchange’s profit recovery could take longer than investors may be pricing in.

In a research note dated Monday, analyst Michael Cyprys reduced the Coinbase target from $258 to $120—about a 53% cut—pointing to recent trading conditions, a softer revenue outlook, and growing uncertainty in the wider crypto market after Binance was hit by a reported $6.3 billion hack. Earlier coverage on Cointelegraph tied the incident to an FBI attribution of responsibility to North Korea.

Key takeaways

• Morgan Stanley slashed its Coinbase price target from $258 to $120, citing slower-than-expected profit recovery risk.
• Analyst Michael Cyprys pointed to weaker trading trends and a less optimistic revenue outlook.
• The downgrade follows heightened market uncertainty after Binance’s reported $6.3 billion hack.
• Coinbase’s latest earnings showed declining net revenue year over year, while net income was boosted by crypto investment gains.

Why Morgan Stanley is more bearish

The bank’s stance centers on timing and durability—specifically how quickly Coinbase can rebound from the current environment. Cyprys highlighted that the firm is seeing conditions that could slow profit recovery compared with what it previously expected. For public market investors, that matters because exchanges like Coinbase often have results closely linked to market activity, user engagement, and trading volumes.

Morgan Stanley also tied part of the caution to broader market uncertainty following the Binance hack referenced in its analysis. A failure or disruption on a major venue can ripple through sentiment across the industry, affecting everything from retail trading behavior to institutional risk appetite—especially in periods where volumes may already be sensitive.

Coinbase’s earnings set the stage

The downgrade arrives shortly after Coinbase reported third-quarter 2026 results. According to Coinbase’s earnings release on Oct. 29, the company recorded roughly a 34% year-over-year decline in third-quarter net revenue to $1.16 billion.

On the bottom line, Coinbase posted $719 million in net income, with the report attributing the result largely to gains on cryptocurrency investments. However, adjusted net income was $78 million—suggesting that while accounting net income looked stronger, underlying profitability may be more modest once investment-related effects are stripped out.

That earnings mix appears to have influenced market pricing quickly. Cointelegraph reported that the results triggered a selloff in crypto-linked equities on Friday, when Coinbase shares fell more than 13% during midday trading amid the fallout that included the Binance hack narrative. Circle shares were reported down more than 9%, while Strategy shares declined about 8%.

Shares respond as the market digests earnings and headlines

On Monday, Coinbase’s stock extended its decline. Yahoo Finance data cited in the original report showed the shares down more than 3.3% at around $138 at the time of writing.

The sequence—earnings followed by a broader risk-off reaction in crypto equities—suggests investors are wrestling with two separate questions: how to interpret Coinbase’s profitability in the quarter (including the role of investment gains) and how quickly trading activity might normalize across the industry.

For traders and long-term holders, the Morgan Stanley cut reinforces an important point: even after a quarter that produced strong headline net income, analysts may still be skeptical about whether sustainable operating earnings will recover at the pace needed to justify higher equity valuations.

What to watch next for Coinbase and crypto exchanges

With Morgan Stanley now framing profit recovery as potentially slower, market participants will likely focus on signs of trading stabilization, any further developments tied to the Binance hack, and subsequent earnings guidance from Coinbase on revenue resilience and the durability of profitability. The near-term question is whether volatility and activity in major trading venues return quickly—or whether the industry’s uncertainty continues to weigh on exchange economics.