Popular cryptocurrency exchange Coinbase (COIN.US ) may face a difficult wake-up call as investors’ expectations for a surge in trading volume following bitcoin’s rally to $30,000 didn’t materialize.
According to the bank’s analysts, Coinbase averaged less than $1 billion in daily trading volume in April, compared with $1.6 billion in March.
The bank believes that while institutional investors are buying Bitcoin and hope retail investors will follow suit, retail investors appear to have little interest. Trading volumes on Coinbase, the platform of choice for retail investors, have been falling despite the rise in bitcoin. The bank maintained its “underperform” rating on Coinbase with a $30 price target.
Coinbase, one of the leading cryptocurrency exchanges, is facing a decline in trading volumes despite the recent surge in bitcoin prices. Analysts at a major bank reported that Coinbase’s average daily trading volume was below $1 billion in April, down from $1.6 billion in March. The unexpected drop in trading volumes has raised concerns among investors, who expect a rise in the price of bitcoin to boost Coinbase’s results.
Many institutional investors have been bullish on Bitcoin, and they have been buying the cryptocurrency in large quantities. These investors also expect retail investors to follow suit and increase their trading activity on Coinbase.
However, retail investors appear less interested, as Coinbase’s trading volumes have been trending down despite the overall positive sentiment in the cryptocurrency market, according to the bank’s analysis. A lack of enthusiasm among retail investors has dampened optimism among institutional investors, who are counting on increased participation from individual traders.
Coinbase has long been considered a popular platform for retail investors to trade cryptocurrencies, and its performance has been closely watched by the market.
However, a recent drop in trading volumes has raised questions about its ability to retain retail investor interest. While rising bitcoin prices have drawn attention from institutional investors, trading volumes on Coinbase have been shrinking, suggesting a possible shift in retail investor preferences for other platforms or investment options.
The bank maintained its “underperform” rating on Coinbase given the decline in trading volumes and waning interest from retail investors. The bank’s analysis suggests that Coinbase may continue to underperform compared to the overall cryptocurrency market. Coinbase’s $30 price target reflects the bank’s cautious outlook on the exchange’s near-term performance.