Goldman Sachs Downgrades Coinbase to “Sell” Rating and Slashes Price Target to $45
Daily Market Wrap
Crypto market cap: 0.92 trillion, down 2.69%
BTC price stands at USD 20,605, down 2.21%
ETH price stands at USD 1,172, down 3.45%
Top gainer: TerraClassicUSD (USTC), up 48.99%
Top loser: XDC Network (XDC), down 13.47%
News of the Day
Goldman Sachs has downgraded Coinbase to a “sell” rating and slashed its price target to $45.
Why it matters:
Goldman Sachs Group Inc. analysts slashed their price target for Coinbase Global Inc. from $70 to $45
The downgrade is due to the continued crypto winter and Coinbase’s recent layoffs of 18% of its workforce
According to the analyst report, Goldman Sachs is bearish on the competitive environment and outlook for fee rate compression
At the time of writing, Coinbase dropped by 5.7% at $59.40 per share during pre-market trading
Crypto Daily Spotlight
Mike Novogratz admits that Terra was running an unsustainable business model.
Brief introduction: Terra is a decentralised stablecoin blockchain that uses fiat-pegged stablecoins to power price-stable global payments systems. Terra’s native token LUNA is used to stabilise the price of the protocol’s stablecoins. On May 9, 2022, Terra (LUNA) collapsed, losing more than 99 percent of its value due to its link to TerraUSD (UST), a stablecoin that was pegged to the U.S. dollar.
Why it matters:
Galaxy Digital CEO Mike Novogratz, who was a major investor in the collapsed Terra ecosystem, admitted in an interview that Terra’s business model was unsustainable
“In hindsight, looking at LUNA, you can’t offer people 18% interest, as they did with Anchor, and not have the world all run into yours,” Novogratz says in the interview
The CEO then went on to add that he is worried about the macro environment and hopes that Bitcoin will stay in the $30,000 to $50,000 price range
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