Morgan Stanley Cuts Coinbase to Underweight, Slashes Target 53%

Morgan Stanley has downgraded Coinbase to underweight from equal weight and cut its price target on the shares to $120 from $258. That is a 53% cut to the target. It implies about 16% downside from Friday's close of $143.54 on 30 October.

The move matters to anyone who trades on the exchange or holds its stock, because the bank's case reportedly comes down to something simple: people traded less crypto in October than its model needed.

A Slow October for Trading Fees

The note to clients, from analyst Michael Cyprys, wasn't available to us. Its details have been reported, though, and they explain the reasoning.

Morgan Stanley's original view expected Coinbase earnings to reset in 2026, then rebound sharply in 2027. Recovering crypto prices, more retail activity, wider product use and operating leverage would carry that rebound. The note reportedly says October's weaker trading pace and an uncertain crypto market now challenge that recovery.

The numbers behind that worry are concrete. Coinbase's transaction revenue, the fees it earns when users trade, reportedly came to about $165 million for the fourth quarter through 25 October. At that pace the quarter lands near $607 million, roughly 11% below the $685 million consensus.

The forecast cuts are reportedly much bigger than one weak month:

• 2027 revenue forecast: cut by 28%
• 2027 adjusted EBITDA estimate: cut by 47%

The note also reportedly flags last week's hack at Binance, which it put at roughly $6 billion, as a reason crypto trading could stagnate further. We haven't checked the size or details of that hack against a primary source.

Other Analysts Still Sit Well Above $120

Morgan Stanley is now an outlier. Five other firms kept their ratings on 30 October, and none of their targets comes close to $120:

Across the wider coverage, 26 of the 41 analysts who follow Coinbase rate it buy or strong buy and 13 rate it hold, according to LSEG data.

The stock had already fallen about 22% over the past month before the downgrade. We haven't confirmed how the shares traded on Monday after the note came out.

The Next Number to Watch

The bank's argument rests on a quarter that's only a few weeks old. If trading picks up through November and December, the roughly $607 million run rate could still close some of the gap to consensus. If it stays at October's pace, the other analysts may have to explain why their targets sit $54 to $155 above Morgan Stanley's.

Either way, Coinbase's fourth-quarter transaction revenue will settle the question.