Coinbase Global Inc ( COIN ) shares are trading lower Tuesday shares amid a drop in Bitcoin (CRYPTO: BTC). The move follows Argus Research downgrading the stock from Buy to Hold on concerns about valuation.

What Happened: As Bitcoin’s decline pulls down cryptocurrency exchange stocks, Coinbase shares are under pressure. The decline shows how closely cryptocurrency businesses follow the prices of digital assets.

Argus Research analyst Kevin Heal downgraded Coinbase from Buy to Hold, saying the stretched valuations, even though the company is performing well. Coinbase shares are trading at 39 times the firm's updated 2026 earnings forecast, far higher than other exchanges, which typically trade in the 24 to 27 times range.

“We are lowering our rating on Coinbase Global Inc ( COIN ) to HOLD from BUY,” Heal wrote, noting that while Coinbase is the leading cryptocurrency trading platform with an great growth record, some investors may move away from crypto asset trading due concerns surrounding volatility.

The analyst pointed out that Coinbase delivered strong third‑quarter results, earning $1.50 per share, up sharply from $0.28 in the the third-quarter of 2024 and topping the $1.10 consensus estimate. Revenue climbed 55% year‑over‑year to $1.9 billion, driven by $1.05 billion in transaction revenue up 6% and $656 million from subscriptions and services up 14%.

Argus also noted that USDC, the world's second‑largest dollar‑backed stablecoin, hit new highs with a market cap above $74 billion. Looking ahead, the firm expects Coinbase to bring in $7.3 billion in revenue in 2025 and $8.4 billion in 2026. However, it cut its earnings forecasts to $7.80 per share from $8.94 for 2025 and $6.55 for $9.56 2026, down from earlier estimates, citing recent weakness in crypto prices.

“We will look to add COIN back to the BUY list when earnings multiples approach other exchanges,” Heal stated.

COIN Price Action: Coinbase shares were down 2.50% at $249.56 at the time of publication on Tuesday, according to Benzinga Pro.

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