- D.A. Davidson analyst downgraded Coinbase stock on Thursday.
- Chris Brendler says RIOT has potential to rally a lot more.
- Both crypto stocks are currently up more than 100% for the year.
The massive year-to-date rally in Coinbase Global Inc (NASDAQ: COIN) should be seen as an opportunity to cut your exposure to this name, says Chris Brendler. He’s a Senior Equity Analyst at D.A. Davidson.
Brendler sees downside in COIN to $60
On Thursday, Brendler downgraded the crypto exchange to “neutral” and announced a price objective of $60 that represents about a 15% downside from here. In a research note, he said:
FTX debacle is still reverberating. While we agree with management’s view that improved clarity and a level playing field should be good, near-term path looks increasingly treacherous.
The analyst particularly quoted regulatory challenges as a meaningful headwind. Last week, the SEC ordered Kraken to terminate crypto staking in the United States – which is concerning for Coinbase since it offers similar services as well.
Coinbase is expected to lose $2.39 a share in its current financial quarter versus $3.32 of per-share earnings a year ago.
Brendler sees more upside potential in RIOT
On the flip side, Bitcoin surpassed $25,000 today for the first time in more than six months that paints somewhat of a rosy picture for the crypto space at large.
According to Brendler, though, there are better alternatives to play that strength in BTC prices than Coinbase. One such substitute that pops out to him is Riot Platforms Inc (NASDAQ: RIOT).
You don’t need to own Coinbase to play bitcoin, miners like RIOT with no debt and bitcoin on their balance sheet have potential to rally a lot more than Coinbase.
Last month, the Nasdaq-listed firm said it produced a record 740 bitcoin in January. As of the end of January, Riot held roughly 6,978 BTC in total. For the year, Riot stock is also up more than 100% at writing.
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Investors and traders are turning their attention to alternative bitcoin sources as a way to increase exposure to the digital currency. One such option is a bitcoin stock, which can provide investors with a convenient and low-cost way to take part in the bitcoin craze. A new analysis suggests that this particular bitcoin stock may be a better buy than Coinbase, the leading provider of bitcoin wallet services.
According to recent research conducted by financial analysts, this bitcoin stock has better potential for growth, meaning investors can expect to make more money with this stock over the long-term. Not only are the potential gains greater with this stock, but it is also easier to buy and use compared to Coinbase. This is because there are fewer restrictions on buying and selling, which makes this stock more user-friendly for those that are just starting out in the bitcoin market.
The stock also has lower transaction fees, which is attractive to traders who are looking to buy and sell the currency on a regular basis. In addition, the stock has been more consistently stable than Coinbase, and it is seen as less likely to be significantly impacted by large market swings and volatility.
Overall, this bitcoin stock’s combination of potential for growth, low transaction fees, and minimal market impact make it a better buy for those interested in investing in digital currencies. As the cryptocurrency sector continues to expand, it is likely that this stock will continue to be one of the preferred options for savvy investors.
