Mizuho is lowering its revenue estimates for Coinbase following a seasonally weak quarter that was further pressured by low trading volumes. The bank said it expects the crypto services firm’s third-quarter revenue to come in 10% below current consensus expectations, and lowered its own estimates by 7%, in a note to investors Wednesday. Mizuho maintained an underweight investment opinion on Coinbase shares as well as a $27 price target, which is about 62% below their current price. “3Q is likely to be sealed with a miss,” Mizuho’s Dan Dolev said in the note. “We expect dwindling volumes combined with an expected drought in retail trading to meaningfully weigh on 3Q revenue.” The cryptocurrency market this year has been plagued by low volatility and diminished liquidity. In August, bitcoin trading volatility fell to its lowest level in more than four years as investors had been waiting on the sidelines for more regulatory clarity on crypto activity – whether through new legislation out of Congress or through the ability to launch a spot bitcoin ETF. According to Mizuho, average daily trading volumes on the Coinbase platform were about $1 billion in the second quarter. That fell to about $900 million in July, $790 million in August and $665 million in September. As a result, Mizuho knocked down its revenue estimate for the quarter to $609 million from $652 million. —CNBC’s Michael Bloom contributed reporting.
