Morgan Stanley has downgraded Coinbase to underweight from equal-weight cutting its price target by 53% to $120 from $258 as weaker trading activity and uncertainty surrounding the cryptocurrency market cloud the exchange’s earnings outlook.

Analyst, Michael Cyprys, said confidence in Coinbase’s earnings recovery had deteriorated citing

  • subdued trading volumes,

  • a softer revenue outlook, and

  • concerns following the $6.3 billion Binance security breach.

The downgrade comes after Coinbase reported third-quarter revenue of $1.22 billion, down 35% from a year earlier and 6% below Morgan Stanley’s estimates. Transaction revenue fell 44% to $590 million while subscription and services revenue declined 20% to $570 million.

 

REPORT | Coinbase Revenue Down 35% and Transactions Fall Over 40% YoY in Q3 2026

 

Morgan Stanley estimates Coinbase’s Q4 2026 transaction revenue at about $608 million, roughly half its previous forecast of $1.2 billion, reflecting weaker-than-expected trading activity.

The bank also reduced its revenue forecasts for 2027 and 2028 by 28% and 18%, respectively while cutting adjusted earnings before interest, taxes, depreciation, and amortization estimates by 47% and 25%.

Its revised 2028 adjusted EBITDA forecast of $2.4 billion is about 14% below 2025 levels, suggesting a more gradual earnings recovery than previously anticipated.

The recent Binance hack, which did not directly affect Coinbase, could further weigh on investor confidence in centralized cryptocurrency exchanges potentially reducing retail trading activity and slowing institutional adoption, Morgan Stanley said.

 

MILESTONE | Binance Gets Hacked in the Largest Crypto Exploit in History

 

Coinbase’s shares fell more than 10% following its earnings report and extended losses days later as investors assessed the weaker outlook.

 

REALITY CHECK | #Coinbase Leads Crypto #Stock Sell-Off as #Binance Hack Deepens Market Pressure

Crypto-linked stocks tumbled, led by Coinbase Global, as a $6.3 billion Binance hack compounded pressure from declining digital-asset revenues and a broader technology-sector sell-off.

@coinbase shares fell more than 13% after the exchange reported a 34% year-on-year decline in Q3 2026 net revenue to $1.16 billion.

@circle dropped more than 9%, while

Bitcoin treasury company, @Strategy, fell about 8%.

Bitcoin #miners and blockchain financial #services firms also posted sharp losses.

Details: https://t.co/ZiZyt1aFXP

#BinanceHack #Coinbase #CryptoReality

— BitKE (@BitcoinKE) October 31, 2026

Despite the downgrade, Morgan Stanley said Coinbase remained one of the best-positioned platforms in the cryptocurrency industry with its

  • regulated U.S. operations,

  • custody infrastructure, and

  • broader product strategy supporting its competitive position.

However, the bank said it sees greater downside risk to earnings expectations and valuation until

  • trading volumes recover,

  • newer products contribute more revenue, and

  • regulatory uncertainty diminishes.

 

 

MARKET ANALYSIS | Robinhood Chain Transactions Fall Over 40% as Trading Activity Slows in October 2026

 

 

 

Stay tuned to BitKE on crypto updates globally.

Join our WhatsApp channel here.

Follow us on X for the latest posts and updates

Join and interact with our Telegram community

__________

#BTC