Morgan Stanley Cuts Coinbase Outlook Amid Competitor Hack and Slowing Recovery

By EC Assets · Published 2 November 2026

Morgan Stanley adopted a bearish outlook on Coinbase Global and reduced its price target for the company, citing a weaker recovery across the cryptocurrency sector. The downgrade follows a turbulent period for the digital asset exchange, whose shares have been battered over the past month. The investment bank advised that market participants steer clear of Coinbase Global as persistent market challenges undermine performance. The firm could remain under sustained downward pressure due to sector-specific disruptions and broader trading contractions. The sustained pressure confronting Coinbase Global stems from severe disruptions within the digital asset ecosystem. A massive cybersecurity hack recently targeted one of the exchange's competitors, dampening sentiment across digital currency platforms. Compounding the operational fallout from the competitor breach, a widespread slowdown in cryptocurrency trading has curtailed platform engagement and volume. These dual pressures have left Coinbase exposed following a month of sharp share price declines. The latest negative assessment follows Morgan Stanley's initial coverage call on September 10, when the investment bank first evaluated the company. That action represented the first time Morgan Stanley initiated formal coverage of Coinbase Global since the cryptocurrency exchange completed its public listing on the Nasdaq exchange under the ticker COIN. The bank established its baseline view at that time, positioning the stock within its broader equity coverage. During the September 10 initiation, Morgan Stanley assigned Coinbase Global an Equal Weight rating, defining the stance as equivalent to a Hold. Alongside that rating, the bank set an initial price target of $250.00 per share. That initial valuation reflected a balanced perspective before the subsequent reduction driven by the weaker recovery. In its detailed initiation assessment, Morgan Stanley reviewed the evolution of Coinbase Global's business model. A bank analyst highlighted that while Coinbase has become broader as a corporate entity, retail cryptocurrency trading continues to drive volatility. The persistent dependence on retail trading activity leaves revenue and operational results tied directly to retail transaction swings during periods of broader market softness. The challenges facing Coinbase Global take place as United States equity markets navigate a prolonged pullback. Morgan Stanley believes the current correction across United States equities could be approaching its final stages. A potential conclusion to the broader equity downturn represents a critical benchmark for risk assets and cryptocurrency-linked equities traded on public exchanges. Morgan Stanley noted that the broader stock market, specifically the benchmark S&P 500, has been contending with correction pressures. The bank indicated that several concurrent developments are aligning that could help clear the path for a recovery across the wider equities complex. Market attention turns to the upcoming United States midterm elections and several accompanying economic developments. Morgan Stanley indicated that the midterm elections, along with these key developments, could potentially clear the way for an end to the current correction in the S&P 500 index. This article is intended for informational purposes only. It does not constitute investment advice.