Approval of Bitcoin ETFs not seen as a boon for Coinbase (COIN)

Coinbase (NASDAQ: COIN) is the custodian for 8 of the 11 spot ETFs approved by the SEC on Wednesday, still, some analysts are questioning if the approval will help the company.

Mizuho analyst Dan Dolev doesn't see the approvals as good news for Coinbase.

"... potential upside to COIN's revenue from Bitcoin ETF may be more muted than thought, with just 1-2% benefit from custody fees and 5-10% total benefit if the ETFs drive additional spot Bitcoin trading," the analyst commented.

In addition, deeper cannibalization of high-margin spot Bitcoin trading and/or share loss to brokers offering ETF could offset future benefits.

"We expect fundamentals to serve as a painful reality check in coming quarters," the analyst added.

The analyst reiterated an Underperform rating and price target of $54 on Coinbase, suggesting about 66% downside from current levels.

Coinbase last traded up 6.3% in pre-open trading Thursday to $160.79.

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