Share this article
Coinbase’s NFT Strategy Questioned by Mizuho Analyst
Dan Dolev is skeptical about the exchange getting into the NFT business at this time, citing a decline in NFT internet searches.
Updated May 11, 2023, 5:58 p.m. Published Apr 5, 2022, 3:31 p.m.
Make us preferred on Google
Crypto exchange Coinbase’s (COIN) plan to launch an non-fungible token (NFT) marketplace this year is drawing some skepticism from Mizuho, which says interest in NFTs “appears to be dwindling.”
In a note to clients, Mizuho analyst Dan Dolev cited an analysis of internet searches showing hype around NFTs has slowed. Dolev estimates that Coinbase may spend up to $300 million this year on its NFT business while overall company profitability could see headwinds, along with higher operating expenses.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
“In a year in which profitability may be challenged, we question the strategic rationale of chasing NFTs, especially as interest in NFTs appears to be dwindling,” Dolev wrote.
Dolev lowered his revenue estimates for Coinbase, citing lower-than-expected Q1 volume and medium-term pressure on average transaction revenue per user owing to the new NFT marketplace. The investment bank maintained a neutral recommendation on Coinbase, but lowered its price target to $190 from $220.
Despite Mizuho’s bearish outlook on Coinbase’s NFT segment, others on Wall Street are expecting strong revenue gains from it. Needham estimated that, in a bullish case, Coinbase could see an additional $1.26 billion in revenue through its NFT business. In January, Goldman Sachs said Coinbase was still the “blue-chip way” for investors to gain crypto exposure.
Shares of Coinbase were down 5.6% to $180.90 on Tuesday, while the price of bitcoin was up slightly over the last 24 hours.
Read more: Jefferies Sees the NFT Market Reaching More Than $80B in Value by 2025
More For You
Hong Kong continues to support local digital asset community growth, chief executive says
The government will continue to support a local crypto/Web3 agenda, Chief Executive John KC Lee said at Consensus.
What to know:
- Hong Kong Chief Executive John KC Lee said the government is committed to making the city a global hub for digital asset and Web3 innovation.
- Lee highlighted the "one country, two systems" framework, deep financial market liquidity and strong investor protections as key advantages for crypto development in the special administrative region.
- The Hong Kong Monetary Authority is close to issuing the first stablecoin licenses, while the Securities and Futures Commission is working to deepen virtual asset market liquidity.
Top Stories
