Quick answer: In a Coinbase downgrade on Nov. 2, 2026, Morgan Stanley moved COIN to underweight from equal weight and cut its price target 53% to $120 from $258. Analyst Michael Cyprys cited weak October trading, a softer revenue outlook and market uncertainty after the Binance hack.
The Coinbase downgrade from Morgan Stanley landed on Monday, Nov. 2, 2026, and it is a blunt one. The bank moved Coinbase (COIN) to underweight and cut its price target by 53%, to $120 from $258.
The reason is simple. Trading on Coinbase slowed in October, and the bank no longer trusts the rebound it had expected for 2027.
What happened in the Coinbase downgrade
Morgan Stanley analyst Michael Cyprys cut his rating on Coinbase from equal weight to underweight in a note to clients. In effect, that is the bank’s version of a sell call. His new $120 target implies about 16% downside from Friday’s close, CNBC reported.
“Confidence in the earnings recovery has deteriorated,” Cyprys wrote, according to CoinDesk. He also pointed to “uncertainty around the backdrop for crypto in the context of the recent Binance hack,” Investing.com reported.
As a result, the bank cut its numbers hard:
- 2027 revenue: down 28%.
- 2027 adjusted EBITDA: down 47%.
- 2028 revenue: down 18%.
- 2028 adjusted EBITDA: down 25%.
The October numbers behind the call
Above all, the key data point is early fourth-quarter trading. Coinbase earned about $165 million in transaction revenue through Oct. 25, Cyprys said. At that pace, the quarter would end near $607 million. That is about 11% below the $685 million consensus, CNBC and Crypto Briefing reported.
It is also about 50% below Morgan Stanley’s own earlier estimate, Investing.com said. In other words, the bank was far more upbeat than the rest of Wall Street, and it had more ground to give back.
Meanwhile, the third quarter was already soft. Coinbase reported $1.22 billion in revenue, down 35% from a year earlier, CoinDesk and TipRanks reported. That was 6% below Morgan Stanley’s forecast. We broke down that report in our Coinbase Q3 earnings analysis.
Since then, shares have dropped about 22% over the past month, CNBC said. They fell 10.62% on Friday after the earnings report and slid again in Monday’s pre-market trading, according to TipRanks.
Why the Coinbase downgrade matters
Coinbase still makes most of its money when people trade. For this reason, its stock tends to track crypto activity, not just crypto prices. That is the core of this call. Even though bitcoin trades near $78,000, volumes have not followed.
On top of that, the Binance hack adds a second layer. North Korean hackers drained about $6.3 billion from Binance last week, as we reported in our Binance hack coverage. Cyprys sees that shock as one more reason traders may stay cautious.
There is a counter-argument, though. Users pulled $3.64 billion from Binance after withdrawals reopened, per our Binance outflows report. In theory, some of that money could land on regulated US platforms such as Coinbase. Morgan Stanley’s note, as reported, does not price in that kind of shift. Still, deposits only help if those users trade.
Our view is that the downgrade is less about Coinbase’s strategy and more about timing. After all, Cyprys himself said the company “continues to execute on its broader strategy.” The problem, however, is that a 2027 rebound now looks less certain.
Data and context
- Analyst split: Of 41 analysts covering Coinbase, 26 rate it a buy or strong buy and 13 rate it a hold, per LSEG data cited by CNBC.
- Consensus target: TipRanks puts the average COIN target at $201.04, about 40% above recent prices.
- Market backdrop: Bitcoin traded at $77,855 and ether at $2,290.72 at 14:49 UTC on Nov. 2, 2026, per CoinGecko. Bitcoin was down 0.2% over 24 hours.
So Morgan Stanley now stands well apart from the crowd. A lone bear call can move a stock for a day. However, it only sticks if the next set of trading numbers backs it up.
What to watch next
First, watch Coinbase’s monthly trading data and any update on fourth-quarter transaction revenue. If November volumes recover, the $607 million pace could prove too low.
Second, track where Binance’s outflows go. Sustained inflows to US exchanges would weaken part of the bear case.
Third, look for other analysts to follow. Further target cuts would signal that Wall Street agrees the recovery has slipped. On the other hand, upgrades on weakness would show the market sees this as a buying point.
Finally, keep an eye on the US midterm elections. Crypto PACs have spent heavily on these races, as our midterms spending report shows, so the result could also shift sentiment toward the sector’s largest US-listed exchange.
FAQ about the Coinbase downgrade
Why did Morgan Stanley downgrade Coinbase?
Mainly, Morgan Stanley cited weaker trading in October, a softer revenue outlook and uncertainty after the Binance hack. Analyst Michael Cyprys said confidence in an earnings recovery has deteriorated.
What is Morgan Stanley’s new Coinbase price target?
The new target is $120, down from $258. CNBC said that implies about 16% downside from the stock’s Friday close.
Do other analysts agree with the Coinbase downgrade?
For now, most do not. Of 41 analysts tracked by LSEG, 26 rate Coinbase a buy or strong buy and 13 rate it a hold.
Sources
- CoinDesk: Morgan Stanley downgrades Coinbase, slashes price target 53%
- CNBC: Coinbase stock downgraded by Morgan Stanley to underweight
- Investing.com: Morgan Stanley bearish on Coinbase
- Crypto Briefing: Morgan Stanley cuts Coinbase price target to $120
- TipRanks: Coinbase stock falls as Morgan Stanley says sell
- CoinGecko price data
This article is for information only and is not financial advice. Do your own research before making any investment decision.
