Citi Cuts Coinbase Price Target to $400 After Stock's 65% Plunge From Record High

Citi cut its price target for Coinbase Global (COIN) to $400 from $505 following a 65% decline in the stock from its record high. The move reflects weaker trading volumes, softer institutional activity, and ongoing uncertainty about U.S. crypto legislation.

The firm revised its fourth-quarter revenue forecasts downward by approximately 10%, trimming its net revenue estimate to $1.69 billion. Despite the adjustment, Citi maintained its 'buy' rating on the stock, emphasizing that Coinbase remains the category leader with significant upside potential if regulatory clarity is achieved.

Analysts highlighted the importance of the CLARITY Act, which could serve as a major catalyst for the stock. However, Senate negotiations on the market structure bill are expected to stretch beyond 2026, delaying meaningful progress.

Why Did the Price Target Drop?

Citi's reduced price target reflects deteriorating near-term market conditions. Analysts pointed to declining trading volumes and muted institutional interest as key factors in the reset. The firm also noted ongoing uncertainty about U.S. crypto legislation, which has created a risk-off sentiment in the sector.

The stock has been volatile, recovering slightly in pre-market action on Friday after a sharp selloff earlier in the week. Bitcoin dropped below $60,000 on Thursday, signaling broader market weakness.

How Did Markets React?

Shares of Coinbase rose 6% in pre-market trading on Friday, outperforming broader market indices. The bounce came despite the broader crypto market remaining in a bearish phase, with altcoins struggling relative to Bitcoin.

Investor sentiment has been influenced by the broader crypto winter, which has persisted since early 2025. Institutional flows have provided some support to Bitcoin, but retail participation has weakened.

What Are Analysts Watching Next?

Citi’s analysts are closely monitoring the regulatory environment, particularly the CLARITY Act, which could provide a regulatory floor for the sector. The firm also noted that Coinbase CEO Brian Armstrong withdrew support for a sweeping digital assets bill due to concerns about consumer protection and competition.

Coinbase is set to release its fourth-quarter and full-year 2025 financial results on February 12. The firm expects a GAAP EPS loss of $2.64, reflecting a $2.3 billion mark-to-market decline in crypto holdings and its stake in Circle.

Analysts are also watching for signs of broader market recovery. Matt Hougan of Bitwise Asset Management believes the crypto winter may be ending, with institutional flows stabilizing Bitcoin prices. However, regulatory and political uncertainty remains a key obstacle.

Coinbase is facing a legal challenge in Nevada, where the state’s Gaming Control Board alleges the company offered unlicensed sports wagers. The firm has filed a motion to block enforcement efforts in federal court.

Investors are also weighing in on the company’s strategic shifts, including its new prediction-markets product and integration of Deribit. The move signals a pivot toward higher-fee derivatives and non-spot trading revenue.

The firm’s stock remains highly volatile, with a beta of 3.70 and a 50-day moving average of $240.17 as of Thursday.

The market will be watching for further clarity on the regulatory landscape, as well as Coinbase’s ability to adapt its business model to shifting conditions.