The sharp decline in the prices of bitcoin and other cryptocurrencies in recent weeks has raised risks for a "crypto winter" that could drag down Coinbase, according to investment firm Mizuho.
The firm slashed its price target on the stock – which has been public for less than two months – to $225 per share from $315, saying that the big drop in cryptocurrencies had put a major downside scenario on the table. Mizuho has a neutral rating on the stock.
The price of bitcoin was trading at over $37,000 on Tuesday afternoon, well above its recent lows but still roughly 40% below its record high from April after a bout of extreme volatility in the crypto market.
The potential for a "winter," which refers to a period when the price of bitcoin and other digital coins are stuck at low levels following a price crash, could mean a significant hit to Coinbase's business, Mizuho said in a note to clients.
Indeed, one example of a crypto winter would be the decline in digital asset prices that started in late 2017.