Coinbase Global ( NASDAQ: COIN ) stock fell 7.2% in Thursday premarket trading after Cowen analyst Stephen Glagola downgraded the cryptocurrency exchange company to Market Perform from Outperform on low visibility of when volume drawdown will stabilize. With 82% of its trailing 12-month net revenue coming from transaction fees it charges retail users, Coinbase's ( COIN ) business hinges on crypto asset prices, trading volumes, and volatility, he said. "COIN’s monthly trading volumes have seen a fairly consistent drawdown each subsequent month since November 2021, and there remains low visibility into either a stabilization or rebound in retail trading volumes over 2023 given the macro backdrop and FTX contagion risks on crypto asset prices," Glagola wrote in a note to clients. December total trading volume of $35B was 25% lower than October's $47B, he pointed out. In addition, the risk of SEC enforcement action has increased after the FTX collapse. "We think there is a risk to a material portion of COIN's non-BTC/ETH trading volumes (36%) and assets under custody (31%) that could be deemed securities by regulators, exacerbating trading volume deterioration," he said. The analyst also expects Coinbase ( COIN ) to start another round of job cuts in early 2023, potentially amounting up to 40%, to align its cost structure with lower trading activity. The Market Perform rating contrasts with the SA Quant rating of Strong Sell and aligns with the average Wall Street rating of Hold. In other crypto news, Silvergate Capital ( SI ) stock sank in premarket trading after announcing job cuts , an impairment charge, debt securities sales, and moves to trim its portfolio to adjust to customer withdrawals. SA contributor Harrison Schwartz remains bullish on Coinbase ( COIN ), as he expects investors to flock to "safe haven" exchanges
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